ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2010

OR

o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 0-15946

EBIX, INC.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation)

77-0021975
(I.R.S. Employer Identification Number)

5 Concourse Parkway, Suite 3200

Atlanta, Georgia

30328

(Address of principal executive offices)

(Zip Code)

Registrants telephone number, including area code: (678) 281-2020

Securities registered pursuant to Section 12(b) of the Act:
None

Securities registered pursuant to Section 12(g) of the Act:

Title of each class

Common Stock, par value $0.10 per share

Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act. Yes o No þ

Indicate by check mark whether the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act. Yes o No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its
corporate Web site, if any, every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period
that the registrant was required to submit and post such files). Yes o No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation
S-K is not contained herein, and will not be contained, to the best of the registrants knowledge,
in definitive proxy or information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. Yes o No þ

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large
accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act. (Check one):

Large accelerated filer o

Accelerated filer þ

Non-accelerated filer o

Smaller reporting company o

(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of
the Exchange Act). Yes o No þ

As of March 14, 2011, the number of shares of Common Stock outstanding was 39,708,750. As of
June 30, 2010 (the last business day of the registrants most recently completed second fiscal
quarter), the aggregate market value of Common Stock held by non-affiliates, based upon the last
sale price of the shares as reported on the NASDAQ Global Capital Market on such date, was
approximately $355,576,066 (for this purpose, the Company has assumed that directors, executive
officers and holders of more than 10% of the Companys common stock are affiliates).

As used herein, the terms Ebix, the Company, we, our and us refer to Ebix, Inc., a
Delaware corporation, and its consolidated subsidiaries as a combined entity, except where it is
clear that the terms mean only Ebix, Inc.

This Form 10-K and certain information incorporated herein by reference contains
forward-looking statements and information within the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, and Section
21E of the Securities Exchange Act of 1934. This information includes assumptions made by, and
information currently available to management, including statements regarding future economic
performance and financial condition, liquidity and capital resources, acceptance of the Companys
products by the market, and managements plans and objectives. In addition, certain statements
included in this and our future filings with the Securities and Exchange Commission (SEC), in
press releases, and in oral and written statements made by us or with our approval, which are not
statements of historical fact, are forward-looking statements. Words such as may, could,
should, would, believe, expect, anticipate, estimate, intend, seeks, plan,
project, continue, predict, will, should, and other words or expressions of similar
meaning are intended by the Company to identify forward-looking statements, although not all
forward-looking statements contain these identifying words. These forward-looking statements are
found at various places throughout this report and in the documents incorporated herein by
reference. These statements are based on our current expectations about future events or results
and information that is currently available to us, involve assumptions, risks, and uncertainties,
and speak only as of the date on which such statements are made.

Our actual results may differ materially from those expressed or implied in these
forward-looking statements. Factors that may cause such a difference, include, but are not limited
to those discussed in Part I, Item IA, Risk Factors, below, as well as: the willingness of
independent insurance agencies to outsource their computer and other processing needs to third
parties; pricing and other competitive pressures and the Companys ability to gain or maintain
share of sales as a result of actions by competitors and others; changes in estimates in critical
accounting judgments; changes in or failure to comply with laws and regulations, including
accounting standards, taxation requirements (including tax rate changes, new tax laws and revised
tax interpretations) in domestic or foreign jurisdictions; exchange rate fluctuations and other
risks associated with investments and operations in foreign countries (particularly in Australia
and India wherein we have significant operations); equity markets, including market disruptions and
significant interest rate fluctuations, which may impede our access to, or increase the cost of,
external financing; and international conflict, including terrorist acts.

Except as expressly required by the federal securities laws, the Company undertakes no
obligation to update any such factors, or to publicly announce the results of, or changes to any of
the forward-looking statements contained herein to reflect future events, developments, changed
circumstances, or for any other reason.

Readers should carefully review the disclosures and the risk factors described in this and
other documents we file from time to time with the SEC, including future reports on Forms 10-Q and
8-K, and any amendments thereto.

You may obtain our SEC filings at our website, www.ebix.com under the Investor Information
section, or over the Internet at the SECs web site, www.sec.gov.

Ebix, Inc. (Ebix, the Company we or our) was founded in 1976 as Delphi Systems, Inc.,
a California corporation. In December 2003 the Company changed its name to Ebix, Inc. The Company
is listed on the NASDAQ Global Market.

Ebix, Inc. is a leading international supplier of software and e-commerce solutions to the
insurance industry. Ebix provides a series of application software products for the insurance
industry ranging from carrier systems, agency systems and exchanges to custom software development
for all entities involved in the insurance and financial industries. As of 31st December 2010,
approximately 71% of Ebix revenues came from on-demand insurance Exchanges.

Our goal is to be the leading powerhouse of backend insurance transactions in the world. The
Companys technology vision is to focus on convergence of all insurance channels, processes and
entities in a manner such that data can seamlessly flow once a data entry has been made.

Ebix strives to work collaboratively with clients to develop innovative technology strategies
and solutions that address specific business challenges. Ebix combines the newest technologies with
its capabilities in consulting, systems design and integration, IT and business process
outsourcing, applications software, and Web and application hosting to meet the individual needs of
organizations.

Recently, we made a number of strategic acquisitions.

On February 7, 2011 we closed the merger of Atlanta, Georgia based A.D.A.M., Inc. (or ADAM)
with a wholly owned subsidiary of Ebix. Under the terms of the merger agreement, ADAM shareholders
received, at a fixed exchange ratio, 0.3122 shares of Ebix common stock for every share of ADAM
common stock. Ebix issued approximately 3,650,914 shares of Ebix common stock pursuant to the
merger. ADAM is a leading provider of health information and benefits technology solutions in the
United States.

During the Companys third quarter ending September 30, 2010, Ebix: (a) acquired all of the
stock of Brazilian-based USIX Technology, S.A. (USIX), a provider of broker systems and related
services for insurance carriers across Latin America; and, (b) acquired all of the stock of
Singapore based E-Trek Solutions PTE Ltd, (E-Trek) a provider of underwriting and claims
processing services for the insurance industry in Singapore. We paid
a total of $8.5 million in
cash consideration for these two business acquisitions and the former shareholders of these
businesses retain the right to earn up to an additional $6.4 million if certain revenue targets are
achieved over the two-year period subsequent to the effective date of the acquisitions. Ebix funded
these acquisitions with internal resources using available cash
reserves.

During the Companys second quarter ending June 30, 2010, Ebix: (a) acquired all of the assets
of Houston, Texas based Connective Technologies, Inc. (Connective Technologies) a premier
provider of on-demand software solutions for property and casualty insurance carriers in the United
States; and, (b) acquired all of the stock of Australian based Trades Monitor a provider of
insurance related software services for the Australian insurance
industry. We paid a total of $4.1
million in cash consideration for these two business acquisitions and the former shareholders of
these businesses retain the right to earn up to an additional $4.5 million if certain revenue
targets are achieved over the two-year period subsequent to the effective date of the acquisitions.
Ebix funded these acquisitions with internal resources using
available cash reserves.

During the Companys first quarter ending March 31, 2010, Ebix acquired all of the stock of
Brazilian based MCN Technology & Consulting (MCN) a provider of software development and
consulting services for insurance companies, insurance brokers, and financial institutions in
Brazil. We paid a total of $3.1 million in cash consideration for this business acquisition and
the former shareholders of MCN retain the right to earn up to an additional $2.0 million if certain
revenue targets are achieved over the two-year period subsequent to the effective date of the
acquisition. Ebix funded this acquisition with internal resources using available cash reserves.

We acquired E-Z Data, Inc. (E-Z Data) effective October 1, 2009. E-Z Data was a leading
industry provider of on-demand customer relationship management (CRM) solutions for insurance
companies, brokers, agents, investment dealers, and financial advisors. We acquired the business
operations and intellectual property of E-Z Data for an aggregate purchase price of $50.5 million
paid to E-Z Datas shareholders consisting of cash consideration in the amount of $25.5 million
paid at closing and $25.0 million in shares of our common stock valued at the average market
closing price for the three most recent days prior to September 30, 2009. We funded the cash
portion of the purchase price for this business acquisition using the proceeds from the Companys
two convertible promissory notes issued in late August 2009.

We acquired Peak
Performance Solutions, Inc. (Peak) effective October 1, 2009. Pursuant to
the terms of the stock purchase agreement, we paid Peaks shareholders $8.0 million in
cash for all
of Peaks outstanding stock. Peak provides comprehensive, end-to-end insurance software and
technology solutions to insurance companies and self-insured entities for workers
compensation
claims processing, risk management administration, and managed care tracking. We funded this
acquisition with
internal resources using available cash reserves. During 2010 the Company reversed the previously
recorded $1.5 million contingent liability earnout obligation because during the subsequent 2010 earnout period
the defined revenue targets were not achieved by the Peak operations.

Effective May 1, 2009, we acquired Facts, Inc. (Facts) a leading provider of fully automated
software solutions for healthcare payers specializing in claims processing, employee benefits, and
managed care. Facts products are available in either an application service provider (ASP) or
self-hosted model. We paid the Facts shareholders $7.0 million in cash for all of Facts stock. We
financed this acquisition with internal resources using available cash reserves.

We acquired ConfirmNet Corporation (ConfirmNet) on November 24, 2008. Pursuant to the terms
of the plan of merger and agreement, Ebix paid ConfirmNet shareholders $7.4 million for all of
ConfirmNets stock. The ConfirmNet shareholders earned an additional $3.1 million for meeting
certain revenue objectives during 2008 which was paid in the first quarter of 2009, and earned an
additional $3.0 million for meeting certain revenue objectives during 2009 which was paid in the
second quarter of 2010.

We acquired Acclamation Systems, Inc, (Acclamation) on August 1, 2008. Pursuant to the terms
of this agreement, on August 1, 2008, Ebix paid Acclamation shareholders $22 million for all of
Acclamations stock. Acclamations shareholders also retain the right to earn up to $3 million in
additional cash consideration over the two year period following the effective date of the
acquisition if specific revenue targets of Ebixs Health Benefits division are achieved. The
Company financed this acquisition using a combination of available cash reserves and the proceeds
from the issuance of convertible debt.

Effective April 28, 2008 Ebix acquired Periculum Services Group (Periculum) a provider of
certificate of insurance tracking services. The Company acquired all of the stock of Periculum for
a payment of $1.1 million and Periculums shareholders earned, and the Company paid an additional
$200 thousand for meeting certain revenue objectives. Ebix financed this acquisition using
available cash.

Effective January 2, 2008 Ebix completed the acquisition of Telstra eBusiness Services Pty
Limited (Telstra), a premier insurance exchange located in Melbourne, Australia. The purchase
price was $43.8 million and was financed with a combination of available cash reserves, proceeds
from the issuance of convertible debt, proceeds from the sales of unregistered shares of the
Companys common stock, and funding from the Companys revolving line of credit.

The Company has its headquarters in Atlanta, Georgia, and it also has domestic operations in
Walnut Creek and Hemet, California; Coral Gables, Florida; Pittsburgh, Pennsylvania; Park City,
Utah; Herndon, Virginia; Dallas and Houston, Texas; Columbus, Ohio, and Pasadena, California. The
Company also has offices in Australia, Brazil, China, Japan, New Zealand, Singapore, United Kingdom
and India. In these offices, Ebix employs insurance and technology professionals who provide
products, services, support and consultancy to more than 3,000 customers on
six continents. Ebixs focus on quality has enabled its development unit in India to be
awarded Level 5 status of the Carnegie Mellon Software Engineering Institutes Capability Maturity
Model Integrated (CMMI). Ebix has also earned ISO 9001:2000 certifications for both its development
and call center units in India.

The Companys revenues are derived from four (4) product or service groups. Presented in
tabular format below is the breakout of our revenue streams for each of those product or service
groups for the year ended December 31, 2010 and 2009:

For the Year Ended

December 31,

(dollar amounts in thousands)

2010

2009

2008

Exchanges

$

94,212

$

60,764

$

42,711

Broker Systems

$

13,841

$

11,599

$

12,347

BPO

$

15,586

$

14,698

$

8,380

Carrier Systems

$

8,549

$

10,624

$

11,314

Totals

$

132,188

$

97,685

$

74,752

Information on the geographic dispersion of the Companys revenues, net income and fixed
assets is furnished in Note 15 to the consolidated financial statements, included elsewhere in this
Form 10-K.

Industry Overview

The insurance industry has undergone significant consolidation over the past several years
driven by the need for, and benefits from, economies of scale and scope in providing insurance in a
competitive environment. The insurance markets have also seen a steady increase in the desire to
reduce paper based processes and improve efficiency both at the back-end side and also at the
consumer end side. Such consolidation has involved both insurance carriers and insurance brokers
and is directly impacting the manner in which insurance products are distributed. Management
believes the insurance industry will continue to experience significant change and increased
efficiencies through online exchanges and reduced paper based processes are becoming increasingly a
norm across the world insurance markets. Changes in the insurance industry are likely to create new
opportunities for the Company.

Products and Services

The Companys product and service strategy focuses on (a) expansion of connectivity between
consumers, agents, carriers, and third party providers through its Exchange family of products in
the life, health, Workers Compensation, Risk management, annuity and P&C sectors worldwide namely
the EbixExchange family of products (b) worldwide sales and support of P&C and management systems
(c) worldwide sale, customization, development, implementation and support of its property and
casualty (P&C) back-end insurance carrier system platforms and, (d) business process outsourcing
services, which include certificate origination, certificate tracking, claims adjudication call
center, and back office support.

Ebixs revenue is generated through four main channels in which the Company conducts its
operations  specifically: Exchanges, Carrier Systems, Broker Systems, and Business Process
Outsourcing. The revenue streams for each of these channels are further described below.

Exchanges: Ebix operates data exchanges in the areas of life insurance, annuities, employee
health benefits, risk management, workers compensation and P&C insurance. Each of these exchanges
connects multiple entities within the insurance markets enabling the participant to seamlessly and
efficiently carry and process data from one end to another. Ebixs life, annuity, and employee
health benefit exchanges currently operate primarily in the United States while the P&C exchanges
operate primarily in Australia and New Zealand. Exchange revenue is primarily derived from
transaction fees charged for each data transaction processed on an Ebix Exchange, with a
transaction being defined as the exchange of data between any two entities using an exchange. These
exchanges have been designed to completely adhere to industry and regulatory data standards.
Accordingly, insurance companies work
with Ebix or third party vendors to interface an exchange with their back-end systems. Since
each exchange is built based on industry standards, the system/exchange interfaces can be built by
Ebix or any other third party vendor, at the clients option. If Ebix builds the interfaces, then
additional revenue is derived in the form of professional services charged on time and materials
basis.

Broker Systems: Ebixs exclusive focus in the area of broker systems is on designing and
deploying back-end systems for P&C insurance brokers across the world. Ebix has three back-end
systems in this area, namely  eGlobal, which targets multinational P&C insurance brokers;
WinBeat, which targets P&C brokers in the Australian and New Zealand markets; and, EbixASP, which
is a system for the P&C insurance brokers in the United States. Revenue from eGlobal is derived
from two main sources  specifically subscription license based revenues and time and material
fees charged to customize the product to a brokers specific functional requirements. Revenue from
WinBeat is derived from monthly subscription fees charged to each P&C broker in Australia and New
Zealand that has deployed the service. Revenue from EbixASP comes from monthly subscription fees
charged to each P&C broker in the United States using the service. All these three products are
presently being redesigned, coded and rebuilt on the most current technologies prevalent today.

Business Process Outsourcing (BPO): Ebixs primary focus in this channel pertains to the
creation and tracking of certificates of insurance issued in the United States and Australian
markets. Ebix provides a software-based service for issuance of certificates which the Company
markets to its P&C broker clients in the United States, to issue certificates of insurance that
fully adhere to industry standards such as ACORD. Ebix derives transaction-based revenues for each
certificate that is issued by the broker for their clients using the Ebix service. Ebix also
provides a service to track certificates of insurance for corporate clients in the United States
and Australia that generates transactional-based revenue based for each certificate tracked by the
Company for its clients.

Ebix also provides software development, customization, and consulting services to a variety
of entities in the insurance industry including carriers, brokers, exchanges and standard making
bodies.

Carrier Systems: Ebixs exclusive focus in the area of carrier systems is on designing and
deploying back-end systems for P&C insurance companies. Revenue from these services is derived from
two main sources  specifically subscription revenues or license revenues from clients and time
and material fees charged to customize these products to an insurance companys specific functional
requirements.

Product Development

The Company has consistently focused on maintaining high quality product development
standards. Our India development facility is certified for Carnegie Mellons highest rating level,
CMMi 5. Product development activities include research and the development of platform and/or
client specific software enhancements such as adding functionality, improving usefulness,
increasing responsiveness, adapting to newer software and hardware technologies, or developing and
maintaining the Companys websites.

The Company has expended $13.6 million, $11.4 million, and $9.0 million during the years
ending December 31, 2010, 2009, and 2008, respectively, on product development initiatives. The
Companys product development efforts are focused on the continued enhancement and redesign of the
its Exchange, broker systems, carrier systems, BPO service lines to keep our technology edge in the
markets, the development new technologies for insurance carriers, brokers and agents, and the
redesign, coding, development of new services for international and domestic markets.

Competition

Ebix is in a unique position of being the only company worldwide in insurance software markets
that provides services in all four of its revenue channels. This also means that in each of these
areas Ebix has different competitors. In fact, in most of these areas Ebix has a different
competitor in each country in which we operate. In the area of insurance data exchanges Ebix has a
different competitor on each line of exchange in each country.

Further in support of Ebixs competitive advantage is the fact that the Company has centralized
worldwide product management, intellectual property rights development, software and system
development operations in Singapore and India. With its strong focus on quality, Ebix-India has
consistently delivered on time for all customer needs across the world. India is rich in technical
skills and the cost structures are significantly lower in India as compared to the United States.
Ebix has continued to develop India as a learning center of excellence with a strong focus on
hiring skilled professional graduates having recently obtained their masters degrees in computer
application and training them on insurance systems and software applications. This focus on
building a knowledge base combined with the ability to hire more professional resources at the
lower cost structures in India, has helped Ebix consistently ensure a strong focus on protecting
knowledge as well as delivering projects on time and in a cost effective fashion.

The following is a closer and more detailed examination of our competition in each of these
four main channels.

Exchanges: Ebix operates a number of exchanges and the competition for each of those exchanges
varies within each of the regions that Ebix operates in.

Life Insurance Exchange  Ebix operates two life insurance exchanges in the United States
-namely Winflex and LifeSpeed. Winflex is an exchange for pre-sale life insurance illustrations
between brokers and carriers, while LifeSpeed is an order entry platform for life insurance. Both
of these exchanges are presently deployed only in the United States with the Company having
distinct plans to deploy them in other parts of the world. Ebix has two main competitors in the
life exchange area  namely Blue Frog and iPipeline. Ebixs differentiates itself from its
competitors by virtue of having an end-to-end solution offering in the market with its exchanges
being interfaced with other broker systems and CRM services like EbixCRM. Ebixs exchanges also
have the largest aggregation of life insurance brokers and carriers transacting business in the
United States.

Annuity Exchange  Ebix operates an annuity exchange in the United States  namely
Annuitynet. This exchange is an order entry platform for annuity transactions between brokers,
carriers, broker general agents (BGAs), and other entities involved in annuity transactions.
This exchange is presently deployed only in the United States with the Company having distinct
plans to deploy it in other parts of the world, such as Latin America. Ebix has one main competitor
in the annuity exchange area  namely Blue Frog. Again, Ebix differentiates itself from its
competitors by virtue of having an end-to-end solution offering in the market with its exchanges
being interfaced with broker systems and CRM services like Ebix CRM. Ebix exchanges also benefit
from transacting the largest amounts of premiums in annuity business on any single exchange in the
United States.

Employee Benefits  Ebix currently provides employee benefit services through two of its
platforms  namely Facts and LuminX. Collectively, these platforms service approximately nine
million lives. These platforms are sold to health carriers and third party administrators. These
platforms provide the full gamut of services such as employee enrollment, claims adjudication,
accounting, and employee benefits administration accounting. Ebix has a number of competitors of
varying sizes in this area. Trizetto is currently the largest player in the market while there are
other similar size competitors, such as Benefit Mall, and Health Axis. This service is presently
deployed in the United States with the company already having started marketing it in other parts
of the world such as Asia, the Middle East, Australia, New Zealand and the United Kingdom.

P&C Exchanges  Ebix operates two P&C exchanges in Australia and New Zealand, besides having
entered the P&C Exchange market in the United States recently. All of these exchanges are targeted
to the areas of personal and commercial lines, and facilitate the exchange of insurance data
between brokers and insurance carriers. Ebix has distinct plans to deploy these exchanges in the
United States, Asia, Europe and Africa. There are presently no competitors in the P&C exchange area
in Australia and New Zealand, however, competition may eventually evolve in these markets. Ebixs
main competitor in P&C exchanges in United States is IVANS. Our competitive differentiation is by
virtue of having an end-to-end solution offering in the market with our exchanges being interfaced
with multiple broker systems.

Broker Systems: Ebix has a number of broker system offerings for P&C brokers world-wide;
namely eGlobal, WinBeat and EbixASP. The competition for these broker systems varies within each of
the regions that Ebix conducts this type of business.

eGlobal is sold across the world and has a customer base that currently spans six continents.
The product is multilingual and multicurrency and available in a number of languages such as
English, Chinese, Japanese, French, Portuguese, and Spanish. eGlobal is targeted to the medium and
large P&C brokers around the world. eGlobal competition tends to be different in each country with
no single competitor having a global offering. eGlobal tends to compete with home grown systems and
regional players in each country. Its uniqueness comes from of the fact that the product is
multilingual, multicurrency and yet still has a common code base around the world with features
that are easily activated and deactivated.

WinBeat is a back-end broker system that is currently sold in Australia and New Zealand. It is
targeted at small P&C brokers in these countries. The product at present is available only in
English and can be deployed in a few hours with minimal training. WinBeats competition in
Australia and New Zealand comes from local vendors such as Lumley and Sirius, an international
vendor. Ebix plans to deploy WinBeat in a number of emerging insurance markets such as India and
China.

Between eGlobal and WinBeat, Ebix broker systems customer base in Australia spans 834 of the
960 P&C brokers in Australia giving it in excess of 85% of the broker systems customer base in
this country. Ebixs broker systems customer base in New Zealand spans 1,500 of the 1,875 P&C
brokers in New Zealand giving it 80% of the customer base in this
country.

EbixASP is Ebixs P&C broker systems offering for the US markets. The service is designed
around the ACORD insurance standards used in the United States. EbixASP has three main competitors
in the US  specifically Vertafore, Applied and XDimensional.

BPO Services: Ebix has a number of BPO services that it offers in the insurance markets, each
of which are enabled by the Companys proprietary software. Ebixs BPO service offerings are mainly
in the areas of insurance certificate issuance and insurance certificate tracking. Ebixs BPO
service offerings currently cater to eighty-five of the Fortune 500 companies in the United States.
Furthermore, internationally Ebix has recently launched its BPO services in Australia and New
Zealand. Ebix intends to eventually take this offering to many other parts of the world.

Ebixs BPO service offering in the insurance certificate issuance area has one main competitor
in the United States, namely CSR 24. Due to the highly fragmented market, the EbixBPO service
offering in the insurance certificate tracking area has a number of smaller competitors such as
Datamonitor, CMS, and Exigis.

Carrier Systems: Ebix has a number of carrier system offerings for P&C carriers namely Ebix
Advantage and Ebix Advantageweb. Ebix Advantage is sold only in the United States and is designed
primarily for this market. Ebix Advantage is targeted at small, medium and large P&C carriers in
the United States that operate in the personal, commercial, and specialty line areas of insurance.
Ebix Advantageweb is designed for the international markets and is targeted at the small, medium
and large P&C carriers in the United States and international markets that operate in the personal,
commercial, and specialty line areas of insurance. Ebix Advantage web is designed to be
multicurrency and multilingual and is deployed in Brazil, United Kingdom and the United States.
Competition to both these products comes from large companies, such as CSC, Guidewire, Rebus, PMSC,
and specialty medical malpractice players like Delphi.

Intellectual Property

Ebix generally seeks protection under federal, state and foreign laws for strategic or
financially important intellectual property developed in connection with our business. We regard
our software as proprietary while adhering to open architecture industry standards and attempt to
protect it with copyrights, trade secret laws and restrictions on the disclosure and transferring
of title. Certain intellectual property, where appropriate, is protected by contracts, licenses,
registrations, confidentiality or other agreements or protections. Despite these precautions, it
may be possible for third parties to copy aspects of the Companys products or, without
authorization, to obtain and use information which the Company regards as trade secrets.

As of December 31, 2010, the Company had 1,179 employees, distributed as follows: 72 in sales
and marketing, 840 in product development, 165 in back-end operations, and 102 in administration,
general management and finance. None of the Companys employees is presently covered by a
collective bargaining agreement. Management considers employee relations to be competitively good.

Executive Officers of the Registrant

Following are the persons serving as our executive officers as of March 14, 2011, together
with their ages, positions and brief summaries of their business experience:

Name

Age

Position

Officer Since

Robin Raina

44

Chairman, President, and Chief Executive Officer

1998

Robert F. Kerris

57

Chief Financial Officer and Corporate Secretary

2007

There are no family relationships among our executive officers, nor are there any arrangements
or understandings between any of the officers and any other persons pursuant to which they were
selected as officers.

ROBIN RAINA, 44, has been Ebixs CEO since September 1999. He has been a Director at Ebix
since 2000 and Chairman of the Board at Ebix since May 2002. Mr. Raina joined Ebix, Inc. in October
1997 as our Vice PresidentProfessional Services and was promoted to Senior Vice PresidentSales
and Marketing in February 1998. Mr. Raina was promoted to Executive Vice President, Chief Operating
Officer in December 1998. Mr. Raina was appointed President effective August 2, 1999, Chief
Executive Officer effective September 23, 1999 and Chairman in May 2002. Mr. Raina holds an
industrial engineering degree from Thapar University in Punjab, India.

ROBERT F. KERRIS, 57, joined the Company as Chief Financial Officer on October 22, 2007. Prior
to joining the Company, Mr. Kerris was Chief Financial Officer at Aelera Corporation. He held this
position from May 2006 to October 2007. Previously he was a Financial Vice President at Equifax,
Inc. from November 2003 to April 2006, Corporate Controller at Interland, Inc. from September 2002
to October 2003, and held senior financial management positions at AT&T, BellSouth, and Northern
Telecom. Mr. Kerris is a licensed certified public accountant and holds an accounting and economics
degree from North Carolina State University.

Our principal executive offices are located at 5 Concourse Parkway, Suite 3200, Atlanta,
Georgia 30328, and our telephone number is (678) 281-2020. Our official Web site address is
http://www.ebix.com. We make available, free of charge, at http://www.ebix.com, the charters for
the committees of our board of directors, our code of conduct and ethics, and, as soon as
practicable after we file them with the SEC, our annual reports on Form 10-K, our quarterly
reports on Form 10-Q, and our current reports on Form 8-K. We will also soon begin posting filings
under Section 16 of the Exchange Act on our Web site. Any waiver of the terms of our code of
conduct and ethics for the chief executive officer, the chief financial officer, any accounting
officer, and all other executive officers will be disclosed on our Web site.

The reference to our Web site does not constitute incorporation by reference of any
information contained at that site.

Item 1A.

RISK FACTORS

You should carefully consider the risks, uncertainties and other factors described below,
along with all of the other information included or incorporated by reference in this prospectus,
including our financial statements and the related notes, before you decide whether to buy shares
of our common stock. The following risks and uncertainties are not the only ones facing us.
Additional risks and uncertainties of which we are currently unaware which we believe are not
material also could materially adversely affect our business, financial condition, results of
operations or cash flows. In any case, the value of our common stock could decline, and you could
lose all or a portion of your investment. See also, Safe Harbor Regarding Forward-Looking
Statements.

Because the support revenue that we have traditionally relied upon has been steadily declining, it
is important that new sources of revenue continue to be developed.

We made a strategic decision approximately six years ago to eliminate our reliance on legacy
products and related support services and instead focus on more current technology and services. As
a result, our revenue from the support services we offer in connection with our legacy software
products has been decreasing over the course of the past few years. This downward trend in our
support revenue makes us dependent upon our other sources of revenue.

Our business may be materially adversely impacted by U.S. and global market and economic
conditions particularly adverse conditions in the insurance industry.

For the foreseeable future, we expect to continue to derive most of our revenue from products
and services we provide to the insurance industry. Given the concentration of our business
activities in financial industries, we may be particularly exposed to economic downturns in this
industry. U.S. and global market and economic conditions have been, and continue to be, disrupted
and volatile, and in recently the volatility has reached unprecedented levels. General business and
economic conditions that could affect us and our customers include fluctuations in debt and equity
capital markets, liquidity of the global financial markets, the availability and cost of credit,
investor and consumer confidence, the exchange rate between the U.S. dollar and foreign currencies,
and the strength of the economies in which our customers operate. A poor economic environment could
result in significant decreases in demand for our products and services, including the delay or
cancellation of current or anticipated projects, or could present difficulties in collecting
accounts receivables from our customers due to their deteriorating financial condition. Our
existing customers may be acquired by or merged into other institutions that use our competitors or
decide to terminate their relationships with us for other reasons. As a result, our sales could
decline if an existing customer is merged with or acquired by another company or closed. All of
these conditions could adversely affect our operating results and financial position.

Our business may be adversely affected by the impacts of proposed health care legislation in the
United States.

Third-party insurance benefit administrators (TPAs) demand for services from our health
benefits exchange operating segment may be significantly reduced due to the diminished role of
TPAs envisioned as a result of the implementation of the Affordable Care Act.

We
could potentially be required to recognize an impairment of
goodwill.

Goodwill represents the excess of the amounts paid us to acquire subsidiaries and other
businesses over the fair value of their net assets at the date of acquisition. At December 31,
2010, we had $180.6 million of assets representing goodwill. See Note 1 to the Consolidated
Financial Statements. We test these assets at least annually for impairment. If it is determined
that goodwill has been impaired, we must write down the goodwill by the amount of the impairment,
with a corresponding charge to net income. These write downs could have a material adverse effect
on our results of operations and financial condition.

We may have exposure to greater than anticipated tax liabilities

Our future income taxes could be adversely
affected by earnings being lower than anticipated in jurisdictions where we have lower statutory tax rates and
higher than anticipated in jurisdictions where we have higher statutory tax rates, by changes in the valuation
of our deferred tax assets and liabilities, or due to changes in tax laws, regulations, and accounting principles
in the domestic and foreign jurisdictions in which we conduct operations. We are subject to regular review and audit
by both domestic and foreign tax authorities. Any adverse outcome of such a review or audit could have a negative
effect on our operating results and financial condition. In addition, the determination of our worldwide provision
for income taxes and other tax liabilities requires significant judgment, and there are some transactions for
which the ultimate tax treatment is uncertain. Although we believe our estimates are reasonable and appropriate,
the ultimate tax outcome may differ from the amounts recorded in our financial statements and may materially affect
our financial results in the period or periods for which such determination is made.

We may not be able to secure additional financing to support capital requirements when needed.

We may need to raise additional funds in the future in order to fund more aggressive brand
promotion or more rapid market penetration, to develop new or enhanced services, to respond to
competitive pressures, to make acquisitions or for other purposes. Any required additional
financing may not be available on terms favorable to us, or at all, particularly in light of
current conditions in the credit markets. If adequate funds are not available on acceptable terms,
we may be unable to meet our strategic business objectives or compete effectively, and the future
growth of our business could be adversely impacted. If additional funds are raised by our issuing
equity securities, stockholders may experience dilution of their ownership and economic interests,
and the newly issued securities may have rights superior to those of our common stock. If
additional funds are raised by our issuing debt, we may be subject to significant market risks
related to interest rates, and operating risks regarding limitations on our activities.

Our recent acquisitions of A.D.A.M., E-Z Data, Peak, Facts, ConfirmNet, Acclamation, and Telstra
as well as any future acquisitions that we may undertake could be difficult to integrate, disrupt
our business, dilute stockholder value and adversely impact our operating results.

The acquisitions of A.D.A.M., E-Z Data, Peak, Facts, ConfirmNet, Acclamation, Telstra and
other potential future acquisitions, subject the Company to a variety of risks, including risks
associated with an inability to
efficiently integrate acquired operations, prohibitively higher incremental cost of
operations, outdated or incompatible technologies, labor difficulties, or an inability to realize
anticipated synergies, whether within anticipated timeframes or at all; one or more of which risks,
if realized, could have an adverse impact on our operations. Among the issues related to
integration such acquisitions are:

potential difficulties in re-training sales forces to market all of our products across
all of our intended markets;



potential difficulties implementing common internal business systems and processes;



potential conflicts in third-party relationships; and



potential loss of customers and key employees and the diversion of the attention of
management from other ongoing business concerns.

We may not be able to develop new products or services necessary to effectively respond to rapid
technological changes. Disruptions in our business-critical systems and operations could interfere
with our ability to deliver products and services to our customers.

To be successful, we must adapt to rapidly changing technological and market needs, by
continually enhancing and introducing new products and services to address our customers changing
demands. The marketplace in which we operate is characterized by:



rapidly changing technology;



evolving industry standards;



frequent new product and service introductions;



shifting distribution channels; and



changing customer demands.

Our future success will depend on our ability to adapt to this rapidly evolving marketplace.
We could incur substantial costs if we need to modify our services or infrastructure in order to
adapt to changes affecting our market, and we may be unable to effectively adapt to these changes.

The markets for our products are highly competitive and are likely to become more competitive, and
our competitors may be able to respond more quickly to new or emerging technology and changes in
customer requirements.

We operate in highly competitive markets. In particular, the online insurance distribution
market, like the broader electronic commerce market, is rapidly evolving and highly competitive.
Our insurance software business also experiences competition from certain large hardware suppliers
that sell systems and system components to independent agencies and from small independent
developers and suppliers of software, who sometimes work in concert with hardware vendors to supply
systems to independent agencies. Pricing strategies and new product introductions and other
pressures from existing or emerging competitors could result in a loss of customers or a rate of
increase or decrease in prices for our services different than past experience. Our internet
business may also face indirect competition from insurance carriers that have subsidiaries which
perform in-house agency and brokerage functions.

Some of our current competitors have longer operating histories, larger customer bases,
greater brand recognition and significantly greater financial and marketing resources than we do.
In addition, we believe we will
face increasing competition as the online financial services industry develops and evolves.
Our current and future competitors may be able to:



undertake more extensive marketing campaigns for their brands and services;



devote more resources to website and systems development;



adopt more aggressive pricing policies; and



make more attractive offers to potential employees, online companies and third-party
service providers.

We regard our intellectual property in general and our software in particular, as critical to our
success.

We rely on copyright laws and nondisclosure, license, and confidentiality arrangements to
protect our proprietary rights as well as the intellectual property rights of third parties whose
content we license. However, it is not possible to prevent all unauthorized uses of these rights.
We cannot provide assurances that the steps we have taken to protect our intellectual property
rights, and the rights of those from whom we license intellectual property, are adequate to deter
misappropriation or that we will be able to detect unauthorized uses and take timely and effective
steps to remedy this unauthorized conduct. In particular, a significant portion of our revenues are
derived internationally including jurisdiction where protecting intellectual property rights may
prove even more challenging. To prevent or respond to unauthorized uses of our intellectual
property, we might be required to engage in costly and time-consuming litigation and we may not
ultimately prevail. In addition, our offerings could be less differentiated from those of our
competitors, which could adversely affect the fees we are able to charge.

If we infringe on the proprietary rights of others, our business operations may be disrupted, and
any related litigation could be time consuming and costly.

Third parties may claim that we have violated their intellectual property rights. Any of these
claims, with or without merit, could subject us to costly litigation and divert the attention of
key personnel. To the extent that we violate a patent or other intellectual property right of a
third party, we may be prevented from operating our business as planned, and we may be required to
pay damages, to obtain a license, if available, to use the right or to use a non-infringing method,
if possible, to accomplish our objectives. The cost of such activity could have a material adverse
effect on our business.

We face risks in the transmittal of individual health-related information.

We face potential risks and financial liabilities associated with obtaining and transmitting
personal account information that includes social security numbers and individual health-related
information. Information may be accessed by outsiders by breaching our security systems or by
inappropriate actions of our personnel. Our risks would include damage of our reputation,
additional costs to address and remediate any problems encountered as well as litigation and
potential financial penalties.

We depend on the continued services of our senior management and our ability to attract and retain
other key personnel.

Our future success is substantially dependent on the continued services and continuing
contributions of our senior management and other key personnel particularly Robin Raina, our
president and chief executive officer. Since becoming Chief Executive Officer of the Company in
1999, his strategic direction for the Company and implementation of such direction has proven
instrumental in our profitable turnaround and growth. The loss of the services of any of our
executive officers or other key employees could harm our business.

Our future success depends on our ability to continue to attract, retain and motivate highly
skilled employees. If we are not able to attract and retain key skilled personnel, our business
will be harmed. Competition for personnel in our industry is intense.

Our international operations are subject to a number of risks that could affect our revenues,
operating results, and growth.

We market our products and services internationally and plan to continue to expand our
internet services to locations outside of the United States. We currently conduct operations in
Australia, New Zealand, and Singapore, and have product development activities and call center
services in India. Our international operations are subject to other inherent risks which could
have a material adverse effect on our business, including:



the impact of recessions in foreign economies on the level of consumers insurance
shopping and purchasing behavior;



greater difficulty in collecting accounts receivable;



difficulties and costs of staffing and managing foreign operations;



reduced protection for intellectual property rights in some countries;



seasonal reductions in business activity;



burdensome regulatory requirements;



trade and financing barriers, and differing business practices;



significant fluctuations in exchange rates;



potentially adverse tax consequences; and



political and economic instability.

Furthermore, our entry into additional international markets requires significant management
attention and financial resources, which could divert managements attention from existing business
operations.

Our financial position and operating results may be adversely affected by the changing U.S. Dollar
rates and fluctuations in other currency exchange rates.

We will be exposed to currency exchange risk with respect to the U.S. dollar in relation to
the foreign currencies in the countries because a significant portion of our operating expenses are
incurred in foreign countries. This exposure may increase if we expand our operations in overseas.
We currently have a series of forward hedges in place to hedge against adverse fluctuations in the
currency exchange rates between the U.S. dollar and Indian rupee. We will monitor changes in our
exposure to exchange rate risk that result from changes in our business situation.

Risks Relating to Regulation and Litigation

Federal Trade Commission laws and regulations that govern the insurance industry could expose us
or the agents, brokers and carriers with whom we participate in our online marketplace to legal
penalties.

We perform functions for licensed insurance agents, brokers and carriers and need to comply
with complex regulations that vary from state to state and nation to nation. These regulations can
be difficult to comply with, and can be ambiguous and open to interpretation. If we fail to
properly interpret or comply with these regulations, we, the insurance agents, brokers or carriers
doing business with us, our officers, or agents with whom we contract could be subject to various
sanctions, including censure, fines, cease-and-desist orders, loss of license or other penalties.
This risk, as well as other laws and regulations affecting our business and changes in the
regulatory climate or the enforcement or interpretation of existing law, could expose us to
additional costs, including indemnification of participating insurance agents, brokers or carriers,
and could require changes to our business or otherwise harm our business. Furthermore, because the
application of online commerce to the consumer insurance market is relatively new, the impact of
current or future regulations on our business is difficult to anticipate. To the extent that there
are changes in regulations regarding the manner in which insurance is sold, our business could be
adversely affected.

Potential liabilities under the Foreign Corrupt Practices Act (whether currently existing or
subsequently discovered) could have a material adverse effect on our business.

We are subject to the Foreign Corrupt Practice Act, or FCPA, which prohibits people or
companies subject to United States jurisdiction and their intermediaries from engaging in bribery
or other prohibited payments to foreign officials for the purposes of obtaining or retaining
business or gaining an unfair business advantage. It also requires proper record keeping and
characterization of such payments in reports filed with the SEC. To the extent that any of our
employees, supplies, distributors, consultants, subcontractors, or others engage in conduct that
subjects us to exposure under the FCPA, or other anti-corruption legislation, we could suffer
financial penalties, debarment from government contracts and other consequences that may have a
material adverse effect on our business, financial condition or results of operations.

Risks Related to Our Conduct of Business on the Internet

Any disruption of our internet connections could affect the success of our internet-based
products.

Any system failure, including network, software or hardware failure, that causes an
interruption in our network or a decrease in the responsiveness of our website could result in
reduced user traffic and reduced revenue. Continued growth in internet usage could cause a decrease
in the quality of internet connection service. Websites have experienced service interruptions as a
result of outages and other delays occurring throughout the internet network infrastructure. In
addition, there have been several incidents in which individuals have intentionally caused service
disruptions of major e-commerce websites. If these outages, delays or service disruptions
frequently occur in the future, usage of our website could grow more slowly than anticipated or
decline and we may lose revenues and customers. If the internet data center operations that host
any of our websites were to experience a system failure, the performance of our website would be
harmed. These systems are also vulnerable to damage from fire, floods, and earthquakes, acts of
terrorism, power loss, telecommunications failures, break-ins and similar events. The controls
implemented by our third-party service providers may not prevent or timely detect such system
failures. Our property and business interruption insurance coverage may not be adequate to fully
compensate us for losses that may occur. In addition, our users depend on internet service
providers, online service providers and other website operators for access to our website. Each of
these providers has experienced significant outages in the past, and could experience outages,
delays and other difficulties due to system failures unrelated to our systems.

Concerns regarding security of transactions or the transmission of confidential information over
the Internet or security problems we experience may prevent us from expanding our business or
subject us to legal exposure.

If we do not maintain sufficient security features in our online product and service
offerings, our products and services may not gain market acceptance, and we could also be exposed
to legal liability. Despite the measures that we have or may take, our infrastructure will be
potentially vulnerable to physical or electronic break-ins, computer viruses or similar problems.
If a person circumvents our security measures, that person could misappropriate proprietary
information or disrupt or damage our operations. Security breaches that result in access to
confidential information could damage our reputation and subject us to a risk of loss or liability.
We may be required to make significant expenditures to protect against or remediate security
breaches. Additionally, if we are unable to adequately address our customers concerns about
security, we may have difficulty selling our products and services.

Uncertainty in the marketplace regarding the use of internet users personal information, or
legislation limiting such use, could reduce demand for our services and result in increased
expenses.

Concern among consumers and legislators regarding the use of personal information gathered
from internet users could create uncertainty in the marketplace. This could reduce demand for our
services, increase the cost of doing business as a result of litigation costs or increased service
delivery costs, or otherwise harm our business. Legislation has been proposed that would limit the
uses of personal identification information of internet users gathered online or require online
services to establish privacy policies. Many state insurance codes limit the collection and use of
personal information by insurance agencies, brokers and carriers or insurance service
organizations. Moreover, the Federal Trade Commission has settled a proceeding against one online
service that
agreed in the settlement to limit the manner in which personal information could be collected
from users and provided to third parties.

Future government regulation of the internet could place financial burdens on our businesses.

Because of the internets popularity and increasing use, new laws and regulations directed
specifically at e-commerce may be adopted. These laws and regulations may cover issues such as the
collection and use of data from website visitors and related privacy issues; pricing; taxation;
telecommunications over the internet; content; copyrights; distribution; and domain name piracy.
The enactment of any additional laws or regulations, including international laws and regulations,
could impede the growth of revenue from our Internet operations and place additional financial
burdens on our business.

Risks Related To Our Common Stock

The price of our common stock may be extremely volatile.

In some future periods, our results of operations may be below the expectations of public
market investors, which could negatively affect the market price of our common stock. Furthermore,
the stock market in general has experienced extreme price and volume fluctuations in recent months.
We believe that, in the future, the market price of our common stock could fluctuate widely due to
variations in our performance and operating results or because of any of the following factors:



announcements of new services, products, technological innovations, acquisitions or
strategic relationships by us or our competitors;



trends or conditions in the insurance, software, business process outsourcing and
internet markets;



changes in market valuations of our competitors; and



general political, economic and market conditions.

In addition, the market prices of securities of technology companies, including our own, have
been volatile and have experienced fluctuations that have often been unrelated or disproportionate
to a specific companys operating performance. As a result, investors may not be able to sell
shares of our common stock at or above the price at which an investor paid. In the past, following
periods of volatility in the market price of a companys securities, securities class action
litigation has often been instituted against that company. If any securities litigation is
initiated against us, we could incur substantial costs and our managements attention could be
diverted from our business.

Quarterly and annual operating results may fluctuate, which could cause our stock price to be
volatile.

Our quarterly and annual operating results may fluctuate significantly in the future due to a
variety of factors that could affect our revenues or our expenses in any particular period. Results
of operations during any particular period are not necessarily an indication of our results for any
other period. Factors that may adversely affect our periodic results may include the loss of a
significant insurance agent, carrier or broker relationship or the merger of any of our
participating insurance carriers with one another. Our operating expenses are based in part on our
expectations of our future revenues and are partially fixed in the short term. We may be unable to
adjust spending quickly enough to offset any unexpected revenue shortfall.

Provisions in our articles of incorporation, bylaws, and Delaware law may make it difficult for a
third party to acquire us, even in situations that may be viewed as desirable by our shareholders.

Our certificate of incorporation and bylaws, and provisions of Delaware law may delay, prevent
or otherwise make it more difficult to acquire us by means of a tender offer, a proxy contest, open
market purchases, removal of incumbent directors and otherwise. These provisions, which are
summarized below, are expected to discourage types of coercive takeover practices and inadequate
takeover bids and to encourage persons seeking to acquire control of us to first negotiate with us.
We are subject to the business combination provisions of Section 203 of the Delaware General
Corporation Law. In general, those provisions prohibit a publicly held Delaware corporation from
engaging in various business combination transactions with any interested stockholder for a
period of three years after the date of the transaction in which the person became an interested
stockholder, unless:



The transaction is approved by the board of directors prior to the date the interested
stockholder obtained interested stockholder status;



Upon consummation of the transaction that resulted in the stockholders becoming an
interested stockholder, the stockholder owned at least 85% of the voting stock of the
corporation outstanding at the time the transaction commenced; or



On or subsequent to the date the business combination is approved by the board of
directors and authorized at an annual or special meeting of stockholders by the affirmative
vote of at least two-thirds of the outstanding voting stock that is not owned by the
interested stockholder.

These provisions could prohibit or delay mergers or other takeover or change of control
attempts with respect to us and, accordingly, may discourage attempts to acquire us.

Item 1B:

UNRESOLVED STAFF COMMENTS

None

Item 2:

PROPERTIES

The Companys corporate headquarters, including substantially all of our corporate
administration and finance functions, is located in Atlanta, Georgia where we lease 39,831 square
feet of commercial office space. In addition the Company and its subsidiaries lease office space of
5,500 square feet in Park City, Utah, 4,148 square feet in Dallas, Texas, 12,000 square feet in
Herndon, Virginia, 10,800 square feet in Hemet, California, 2,156 square feet in Walnut Creek,
California, 11,500 square feet in Pittsburgh, Pennsylvania, 5,300 square feet in Portland,
Michigan, 7,000 square feet in San Diego, California, 2,826 square feet in Miami, Florida, 25,482
square feet in Pasadena, California, 4,384 square feet in Lynchburg, Virginia, 5,289 square feet in
Columbus, Ohio, and 4,400 square feet in Houston, Texas. Additionally, the Company leases office
space in New Zealand, Australia, Singapore, Brazil, Canada, Japan, and China for support and sales
offices. The Company owns three facilities in India with total square footage of approximately
65,000 square feet and leases an additional two. The Indian facilities provide software development
and call center services for customers. Management believes its facilities are adequate for its
current needs and that necessary suitable additional or substitute space will be available as
needed at favorable rates.

Item 3:

LEGAL PROCEEDINGS

In the normal course of business, the Company is a party to various legal proceedings. The
Company does not expect that any currently pending proceedings will have a material adverse effect
on its business, results of operations or financial condition.

At December 31, 2010 the principal market for the Companys common stock was the NASDAQ Global
Capital Market. The Companys common stock trades under the symbol EBIX. As of March 14, 2011,
there were 101 registered holders of record of the Companys common stock.

The following tables set forth the high and low closing bid prices for the Companys common
stock for each calendar quarter in 2010 and 2009. The 2009 per share prices have been
retroactively adjusted to reflect the effect of the 3-for-1 stock split dated January 4, 2010.

Year Ended December 31, 2010

High

Low

First quarter

$

17.93

$

13.91

Second quarter

16.95

14.01

Third quarter

24.00

15.06

Fourth quarter

26.28

20.75

Year Ended December 31, 2009

High

Low

First quarter

$

8.57

$

5.91

Second quarter

11.33

7.71

Third quarter

18.45

10.41

Fourth quarter

21.92

14.89

Holders

As of March 14, 2011, there were 39,708,750 shares of the Companys common stock outstanding

Dividends

The Company has not paid any cash dividends on its common stock to date. The Company currently
anticipates that it will retain any future earnings for the expansion and operation of its
business. Accordingly, the Company does not anticipate paying cash dividends on its common stock in
the foreseeable future.

Securities Authorized for Issuance Under Equity Compensation Plans

The Companys equity compensation is currently governed by the 2010 Ebix Equity Incentive Plan
as approved by our stockholders. The table below provides information as of December 31, 2010
related to this plan.

On October, 1, 2009, as part of the consideration for the purchase of E-Z Data, Inc. (E-Z
Data), we issued at closing $25 million in shares of Ebix common stock valued at the average
market closing price for the three most recent days prior to September 30, 2009. This resulted in
the issuance of 1,488,984 shares of our common stock, 744,492 shares to each its two former
shareholders, Dale Okuno and Dilip Sontakey, both accredited investors within the meaning of Rule
501 of Regulation D. The Company relied upon Section 4(2) of the Securities Act of 1933 and
Regulation D promulgated there under in making this sale in a private placement to accredited
investors who acquired the shares for investment purposes. Under the terms of the agreement the E-Z
Data sellers hold a put option exercisable during the thirty-day period immediately following the
two-year anniversary date of the business acquisition, which if exercised would enable them to sell
the underlying shares of common stock back to the Company at a price of $15.11 per share, which
represents a 10% discount off of the per-share value established on the effective date of the
closing of Ebixs acquisition of E-Z Data. Ebix was obligated to file with the SEC a registration
statement for the underlying shares of our common stock and use our reasonable best efforts to
cause the SEC to declare the registration statement effective. This registration statement, number
333-163459, became effective on February 26, 2010.

On August 26, 2009, we entered into an unsecured Convertible Note Purchase Agreement (the
Whitebox Agreement) with Whitebox VSC, Ltd (Whitebox or the Holder). As a result of the
transactions consummated by the Whitebox Agreement the Company issued a Convertible Promissory Note
(the Whitebox Note) with a date of August 26, 2011 (the Maturity Date) in the original
principal amount of $19.0 million, which is convertible into shares of Ebix common stock at a price
of $16.00 per share, subject to certain adjustments as set forth in the Whitebox Note. The Whitebox
Note had a 0.0% stated interest rate. In accordance with the terms of the Whitebox Note, as had
been understood between the Company and the Holder, upon a conversion election by the Holder the
Company had to satisfy the related original principal balance in cash and could satisfy the
conversion spread (that being the excess of the conversion value over the related original
principal component) in either cash or stock at option of the Company. During 2010 Whitebox VSC,
Ltd elected to fully convert all of the August 26, 2009 Convertible Promissory Note. The Company
settled this conversion election by paying $19.0 million in cash with respect to the principal
component, paying $2.3 million in cash for a portion of the conversion spread, and issuing 275,900
shares of Ebix common stock for the remainder of the conversion spread.

On August 26, 2009, we entered into an unsecured Convertible Note Purchase Agreement (the IAM
Agreement) with IAM Mini-Fund 14 Limited (IAM or the Holder), a fund managed by Whitebox. As a
result of the transactions consummated by the IAM Agreement the Company issued a Convertible
Promissory Note (the IAM Note) with a date of August 26, 2011 (the Maturity Date) in the
original principal amount of $1.0 million, which is convertible into shares of our common stock at
a price of $16.00 per share, subject to certain adjustments as set forth in the IAM Note. The IAM
Note has a 0.0% stated interest rate. In accordance with the terms of the IAM Note, as understood
between the Company and the Holder, upon a conversion election by the Holder the Company had to
satisfy the related original principal balance in cash and could satisfy the conversion spread
(that being the excess of the conversion value over the related original principal component) in
either cash or stock at option of the Company. During 2010 IAM elected to fully convert all of the
August 26, 2009 Convertible Promissory Note. The Company settled this conversion election by paying
$1.0 million in cash with respect to the principal component,
paying $221 thousand in cash for a
portion of the conversion spread, and issuing 7,478 shares of Ebix common stock for the remainder
of the conversion spread.

On August 25, 2009, we entered into an unsecured Convertible Note Purchase Agreement (the
Rennes Agreement) with the Rennes Foundation (Rennes or the Holder). As a result of the
transactions consummated by the Rennes Agreement the Company issued a Convertible Promissory Note
(the Rennes Note) with a date of August 25, 2011 (the Maturity Date) in the original principal
amount of $5.0 million, which is convertible into shares of Ebix common stock at a price of $16.67
per share, subject to certain adjustments as set forth in the Rennes Note. The Rennes Note has a
0.0% stated interest rate. In accordance with the terms of the Rennes Note, as understood between
the Company and the Holder, upon a conversion election by the Holder the Company must satisfy the
related original principal balance in cash and may satisfy the conversion spread (that being the
excess of the conversion value over the related original principal component) in either cash or
stock at option of the Company. Previous to this transaction Rennes has been and continues to be a
beneficial owner of the Company, with a
beneficial ownership percentage of approximately 8.6%. Rolf Herter, a member of our Board of
Directors, is also a director of the Rennes Foundation.

As provided for
under previous Board authorized share repurchase plans, from January
through August 2010 the
Company repurchased 669,978 shares of our common stock for a total aggregate purchase price of
$10.7 million. The Company did not repurchase any shares of its
Common Stock during the period September through December 2010.

Item 6:

SELECTED FINANCIAL DATA

The
following data for fiscal years 2010, 2009, 2008, 2007, and 2006 should be read in conjunction with
Managements Discussion and Analysis of Financial Condition and Results of Operations and with
our consolidated financial statements and the related notes and other financial information
included herein.

Adjusted to reflect the effect of the 3-for-1 stock split dated January 4, 2010

PERFORMANCE GRAPH

The line graph below compares the yearly percentage change in cumulative total stockholder
return on our Common Stock for the last five fiscal years with the NASDAQ Stock Market (U.S.) stock
index and the NASDAQ Computer Index. The following graph assumes the investment
of $100 on December 31, 2005, and the reinvestment of any dividends (rounded to the nearest
dollar).

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

As used herein, the terms Ebix, the Company, we, our and us refer to Ebix, Inc., a
Delaware corporation, and its consolidated subsidiaries as a combined entity.

The information contained in this section has been derived from our historical financial
statements and should be read together with our historical financial statements and related notes
included elsewhere in this document. The discussion below contains forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These forward-looking statements involve risks and
uncertainties including, but not limited to: demand and acceptance of services offered by us, our
ability to achieve and maintain acceptable cost levels, rate levels and actions by competitors,
regulatory matters, general economic conditions, and changing business strategies. Forward-looking
statements are subject to a number of factors that could cause actual results to differ materially
from our expressed or implied expectations, including, but not limited to our performance in future
periods, our ability to generate working capital from operations, the adequacy of our insurance
coverage, and the results of litigation or investigation. Our forward-looking statements can be
identified by the use of terminology such as anticipates, expects, intends, believes,
will or the negative thereof or variations thereon or comparable terminology. Except as required
by law, we undertake no obligation to publicly update or revise any forward-looking statement,
whether as a result of new information, future events or otherwise.

OVERVIEW

Ebix, Inc. is a leading international supplier of on-demand software and e-commerce solutions
to the insurance industry. Ebix provides a series of application software products for the
insurance industry ranging from carrier systems, agency systems and exchanges to custom software
development for all entities involved in the insurance and financial industries. Approximately 80%
of the Companys revenues are of a recurring nature. Rather than license our products in
perpetuity, we typically either license them for a few years with ongoing support revenues, or
license them on a limited term basis using a subscription hosting or ASP model. Our goal is to be
the leading powerhouse of backend insurance transactions in the world. The Companys technology
vision is to focus on convergence of all insurance channels, processes and entities in a manner
such that data can seamlessly flow once a data entry has been made. Our customers include many of
the top insurance and financial sector companies in the world.

The insurance industry has undergone significant consolidation over the past several years
driven by the need for, and benefits from, economies of scale and scope in providing insurance in a
competitive environment. The insurance markets have continuously increased their demands for
cutting edge solutions to reduce paper based processes and improve efficiency both at the back-end
side and at the consumer end side of their insurance transaction processing. Such consolidation has
involved both insurance carriers and insurance brokers and is directly impacting the manner in
which insurance products are distributed. Management believes the world-wide insurance industry
will continue to experience significant change and the need for increased efficiencies through
online exchanges and streamlined processes. The changes in the insurance industry are likely to
create new opportunities for the Company.

Management focuses on a variety of key indicators to monitor operating and financial
performance. These performance indicators include measurements of revenue growth, operating income,
operating margin, income from continuing operations, diluted earnings per share, and cash provided
by operating activities. We monitor these indicators, in conjunction with our corporate governance
practices, to ensure that our business is efficiently managed and that effective controls are
maintained.

The key performance indicators for the twelve months ended December 31, 2010, 2009, and 2008
were as follows:

Key Performance Indicators

Twelve Months Ended December 31,

(Dollar amounts in thousands except per share data)

2010

2009

2008

Revenue

$

132,188

$

97,685

$

74,752

Revenue growth

35

%

31

%

74

%

Operating income

$

52,507

$

39,256

$

29,264

Operating margin

40

%

40

%

39

%

Net Income

$

59,019

$

38,822

$

27,314

Diluted earnings per share *

$

1.51

$

1.03

$

0.76

Cash provided by operating activities

$

52,779

$

33,877

$

26,825

*

Adjusted to reflect the effect of the 3-for-1 stock split dated January 4, 2010

RESULTS OF OPERATIONS

Year Ended

Year Ended

Year Ended

December 31,

December 31,

December 31,

2010

2009

2008

(In thousands)

Operating revenue:

$

132,188

$

97,685

$

74,752

Operating expenses:

Costs of services provided

29,599

21,274

14,161

Product development

13,607

11,362

8,962

Sales and marketing

6,372

5,040

4,344

General and administrative

24,065

16,798

14,715

Amortization and depreciation

6,038

3,955

3,306

Total operating expenses

79,681

58,429

45,488

Operating income

52,507

39,256

29,264

Interest income (expense), net

(383

)

(871

)

(1,151

)

Other non-operating income

6,319

89



Foreign exchange gain

1,211

1,358

586

Income before taxes

59,654

39,832

28,699

Income tax expense

(635

)

(1,010

)

(1,385

)

Net income

$

59,019

$

38,822

$

27,314

TWELVE MONTHS ENDED DECEMBER 31, 2010 AND 2009

Operating Revenue

The Company derives its revenues primarily from professional and support services, which
includes subscription and transaction fees pertaining to services delivered over our exchanges or
from our ASP platforms, revenue generated from software development projects and associated fees
for consulting, implementation, training, and project management provided to customers with
installed systems, and business process outsourcing revenue. Ebixs revenue streams come from four
product channels. Presented in the table below is the breakout of our revenues for each of those
product channels the years ended December 31, 2010 and 2009.

During the twelve months ended December 31, 2010 our total revenue increased $34.5 million or
35%, to $132.2 million compared to $97.7 million in 2009. The increase in
revenues is principally a result of the impact certain strategic business acquisitions made during
2010 and 2009 in our Exchange and BPO channels, and continued organic
growth realized in our Exchange
channels. Our ability to quickly integrate business acquisitions into existing operations enables
the Company to rapidly leverage product cross-selling opportunities. The specific components of our
revenue and the changes experienced during the past year are discussed further below.

Exchange division revenues increased $33.4 million or 55% primarily due to net
increases of approximately $17.9 million in the life and annuity sector, $13.4 million in the
property & casualty sector, and $2.6 million from the health insurance sector.

BPO division revenues increased $880 thousand or 6% due to greater demand for our
insurance certificate creation and tracking services. The Companys growth in this channel was
strongly impacted by the downturn in the commercial and residential housing industry, which drove
down the transaction volume derived from clients associated within the construction industry, which
traditionally accounts for approximately 35% of the insurance certificates in the United States.

Broker Systems division revenue increased $2.2 million or 19% principally due to
further expansion into the international markets, and the associated growth of our on-demand
back-end systems designed for use by insurance brokers.

Carrier Systems division revenue decreased $2.1 million or 20% due to continued delays
in capital spending decisions related to large investments in perpetually licensed back-end systems
designed for use by large insurance companies as also Ebix changing its revenue model for new
prospective clients, from a license based model to a subscription based recurring model. With
improving domestic and world-wide economic conditions during 2011 we would expect these insurance
carriers to deploy new technologies and increase their spending for system development, and that
our revenues from this channel will increase as also become more recurring in nature during the
forthcoming year.

Costs of Services Provided

Costs of services provided, which includes costs associated with customer support, consulting,
implementation, and training services, increased $8.3 million or 39%, from $21.3 million in 2009 to
$29.6 million in 2010. This cost increase is attributable to additional personnel, professional
services, and facility costs associated with our 2009 acquisitions of E-Z Data and Peak, the 2010
expansion into the Latin America market, and the increased research & development efforts towards
designing new futuristic on-demand based services.

Product Development Expenses

Product development expenses increased $2.2 million or 20%, from $11.4 million in 2009 to
$13.6 million in 2010. The Companys product development efforts are focused on the development
new technologies for insurance carriers, brokers and agents, and the development of new exchanges
for international and domestic markets. This cost increase is associated with the continued
expansion of our technical operations in India and our intellectual property management operations
in Singapore, both in support of the Companys Exchange, Broker Systems, and Carrier Systems
divisions.

This increase is primarily due to costs associated with new product development activities in
support of our exchange and BPO channels.

Sales and Marketing Expenses

Sales and marketing expenses increased $1.3 million or 25%, from $5.1 million in 2009 to $6.4
million in 2010. This expense increase is primarily attributable to additional personnel,
marketing, consulting, and facility related costs in support of the increased revenues generated by
our Exchange and Broker Systems channels.

General and administrative expenses increased $7.3 million or 43%, from $16.8 million in 2009
to $24.1 million in 2010. This increase primarily associated with additional personnel, increased
health and business insurance costs, additional consulting services, increased business travel
costs, and additional share-based and discretionary bonus compensation. Also a factor contributing
the net increase to general and administrative expenses was the $822 thousand of potential bad
expense that was recognized in connection with the Companys decision to increase its reserve for
doubtful accounts receivable. Partially offsetting these increases in general and administrative
expenses was a $1.5 million benefit associated with the reversal of a previously recorded
contingent liability earnout obligation associated with our October 2009 acquisition of Peak,
because during the subsequent 2010 earnout period the defined revenue targets was not achieved by
the Peak operations.

Amortization and Depreciation Expenses

Amortization and depreciation expenses increased $2.1 million, or 54%, from $3.9 million in
2009 to $6.0 million in 2010. This increase is due to $1.3 million of additional amortization
expense incurred in connection with the customer relationship, developed technology, and
non-compete intangible assets that were recognized in connection with our 2010 business
acquisitions of MCN, Trades Monitor, and USIX, and our 2009 business acquisitions of E-Z Data,
Facts, and Peak. We also incurred increased depreciation expense amounting to $795 thousand related
to additional capital equipment expenditures in support of our growing businesses.

Interest Income

Interest income increased $320 thousand or 161% from $199 thousand in 2009 to $519 thousand in
2010 primarily due to earnings realized on funds invested in foreign banks.

Interest Expense

Interest expense decreased $168 thousand or 16% from $1.1 million in 2009 to $902 thousand in
2010. This decrease is primarily due to the full conversion of $20.0 million of convertible debt
during the third and fourth quarters thereby ceasing further recognition of the imputed interest
expense associated with these debt instruments.

Other Non-Operating Income

Other non-operating income of $6.3 million for the year ending December 31, 2010 consists of a
$6.0 million gain recognized for the decrease in the fair value of the put option that was issued
to the two former stockholders of E-Z Data whom received shares of Ebix common stock as part of the
acquisition consideration paid by the Company, and a $262 thousand gain realized upon the sale of a
building.

Foreign Exchange Gain

Net foreign exchange gains decreased $147 thousand or 11% from $1.4 million in 2009 to $1.2
million in 2010. This net decrease is due to the $949 thousand impact of re-measuring certain
intercompany debt obligations largely offset by $802 thousand of gains recorded in connection with
the changes in the fair value of the related derivative instruments the Company holds to hedge the
impact of fluctuations in the exchange rates in the foreign jurisdictions in which we conduct our
international operations.

Income Taxes

Income tax expense decreased $375 thousand, or 37%, from $1.0 million in 2009 to $635 thousand
in 2010. Our effective tax rate was 1.1% for the twelve months ended December 31, 2010, down from
2.5% for the same period in 2009. Primarily affecting the decrease in income tax expense and our
consolidated effective tax rate was the benefit recognized from the $2.3 million release of the
remaining valuation allowance that had been held against cumulative legacy net operating loss
(NOL) carryforwards in the United States. This valuation allowance was released as management
believes that the uncertainties that had existed as to the performance of our health benefits
exchange operating segment related to the potential adverse impacts associated with the than
pending health care legislation are no longer relevant. Total income
tax expense and the effective tax rate before the
release of valuation allowance would have been approximately
$2.9 million and 4.8% respectively. Also facilitating the
relatively low consolidated world-wide effective tax rate are the advantages the Company realizes
from conducting activities in certain foreign low tax jurisdictions.

The Company derives its revenues primarily from professional and support services, which
includes revenue generated from software development projects and associated fees for consulting,
implementation, training, and project management provided to customers with installed systems,
subscription and transaction fees pertaining to services delivered over our exchanges or from our
ASP platforms, and business process outsourcing revenue. Ebixs revenue streams come four product
channels. Presented in the table below is the breakout of our revenues for each of those product
channels the years ended December 31, 2009 and 2008.

For the Year Ended

December 31,

(dollar amounts in thousands)

2009

2008

Exchanges

$

60,764

$

42,711

Broker Systems

$

11,599

$

12,347

BPO

$

14,698

$

8,380

Carrier Systems

$

10,624

$

11,314

Totals

$

97,685

$

74,752

During the twelve months ended December 31, 2009 our total revenue increased $22.9 million or
30.7%, to $97.7 million in 2009 compared to $74.8 million in 2008. The increase in revenues is a
result of both the impact of strategic business acquisitions made during 2009 and 2008 particularly
in the area of exchanges, and in our BPO channel, as well as organic growth realized in our BPO and
Exchange channels. We are able to quickly integrate business acquisitions into our existing
operations and thereby rapidly leverage product cross-selling opportunities. The specific
components of our revenue and the changes experienced during the past year are discussed further
below.

Exchange division revenues increased $18.1 million, which was primarily due to net
increases of approximately $9.2 million from the health insurance sector and $8.9 million from the
life & annuity sector.

BPO division revenues increased $6.3 million primarily due to greater demand for our
insurance certificate creation and tracking services. The Company was able to increase sales in
this product channel in spite of the downturn in the housing industry which drove down the
transaction volume derived from clients associated with the construction industry.

Broker Systems division revenue decreased $748 thousand which was primarily caused by
a $943 thousand reduction in support and maintenance revenues associated with our legacy products
as we continue to migrate customers off of these older platforms, and the strengthening of U.S.
dollar against the Australian dollar which appreciated by 7.8% during the year and resulted in an
approximate drop of $571 thousand of reported revenues from our broker systems operations in
Australia. The revenue declines were partially offset by $335 thousand of sales growth from our in
our broker system operations in New Zealand. The revenue decline largely can be associated to the
overall downturn in the worldwide insurance markets in 2009, resulting in brokers spending less
money on back end systems.

Carrier Systems division revenue decreased $690 thousand due to temporary delays in
capital spending decisions as related to investments in back-end systems by large insurance
companies. During 2011 we expect these insurance carriers to deploy new technologies and increase
their spending for system development, and that our revenues from this channel will improve during
the forthcoming year.

Costs of services provided, which includes costs associated with customer support, consulting,
implementation, and training services, increased $7.1 million or 50.2%, from $14.2 million in 2008
to $21.3 million in 2009. This net cost increase is primarily attributable to approximately $6.1
million of additional personnel, professional services, and facility costs associated with our
recent acquisitions of ConfirmNet, Facts, Peak, and E-Z Data. Also contributing to the increases in
the costs of services provided was approximately $395 thousand of additional personnel related
costs in support of existing operations.

Product Development Expenses

Product development expenses increased $2.4 million or 26.8%, from $9.0 million in 2008 to
$11.4 million in 2009. The Companys product development efforts are focused on the development new
technologies for insurance carriers, brokers and agents, and the development of new exchanges for
international and domestic markets. This increase is primarily due to costs associated with new
product development activities in support of our exchange and BPO channels.

Sales and Marketing Expenses

Sales and marketing expenses increased $696 thousand or 16%, from $4.3 million in 2008 to $5.0
million in 2009. This increase is primarily attributable to additional personnel and marketing
costs in support of the increased revenues being generated by our exchange and BPO channel
amounting to $1.1 million, partially offset by approximately $347 thousand in reduced direct
mailing, consulting, and travel costs.

General and Administrative Expenses

General and administrative expenses increased $2.1 million or 14.2%, from $14.7 million in
2008 to $16.8 million in 2009. This increase is the result of additional expenses associated with
increased employee count, audit and legal fees, tax advisory services, share-based compensation,
and discretionary bonuses amounting approximately $1.7 million in the aggregate.

Amortization and Depreciation Expenses

Amortization and depreciation expenses increased $649 thousand, or 19.6%, from $3.3 million in
2008 to $3.9 million in 2009. Additional amortization cost amounting to $507 thousand was
recognized in connection with the amortization of acquired intangible assets associated with the
business combinations completed during 2008 and 2009. Also the Company recorded $211 thousand of
additional depreciation expenses incurred by Facts, Peak, and E-Z Data operations which were
acquired during 2009.

Interest Income

Interest income decreased $276 thousand or 58.1% from $475 thousand in 2008 to $199 thousand
in 2009 primarily due to a lower effective interest rate earned on deposited funds which dropped
from 4.52% in 2008 to 1.45% in 2009.

Interest Expense

Interest expense decreased $556 thousand or 34.2% from $1.6 million in 2008 to $1.1 million in
2009. This decrease is primarily due to a reduction of $540 thousand in the average outstanding
balance on our revolving line of credit in conjunction with a 2.36% drop in the interest rate on
the credit facility from 4.00% to 1.64%, which together facilitated a $539 thousand reduction in
interest expense.

Foreign exchange gains increased $772 thousand or 131.7% from $586 thousand in 2008 to $1.4
million in 2009. This improvement is primarily due to the $498 thousand increase in the fair value
of the derivative instruments the Company put in place during 2009 to hedge the impact of
fluctuations in the exchange rate between the U.S. dollar and the Indian rupee as pertaining to the
U.S. dollar denominated invoices issued by our Indian subsidiary whose functional currency is the
Indian rupee. The remaining $274 thousand of increase foreign exchange gains result from the
settlement of transactions denominated in other than our subsidiarys functional currency.

Income Taxes

Income tax expense decreased $375 thousand, or 27.1%, from $1.4 million in 2008 to $1.0
million in 2009. Our effective tax rate was 2.5% for the twelve months ended December 31, 2009,
down from 4.8% for the same period in 2008. Primarily affecting the decrease in income tax expense
and our consolidated effective tax rate was the $2.82 million release of a portion of the
preexisting valuation allowance that had been held against cumulative legacy net operating loss
(NOL) carryforwards in the United States, partially offset by a $2.04 million charge to increase
the Companys reserves for uncertain tax filing positions as evaluated by management. Also
facilitating the relatively low consolidated world-wide effective tax rate was the utilization of
$14.6 million of NOLs to offset 2009 U.S. taxable income and advantages the Company realizes from
conducting activities in certain foreign low tax jurisdictions.

LIQUIDITY AND CAPITAL RESOURCES

Our ability to generate significant cash flows from operating activities is one the Companys
fundamental financial strengths. Our principal sources of liquidity are the cash flows provided by
our operating activities, our revolving credit facility, and cash and cash equivalents on hand. Due
to the effect of temporary or timing differences resulting from the differing treatment of items
for tax and accounting purposes and minimum alternative tax obligations in the U.S. and India,
future cash outlays for income taxes are expected to exceed current income tax expense but will not
adversely impact the Companys liquidity position. We intend to utilize cash flows generated by our
ongoing operating activities, in combination with possibly expanding our commercial lending
facility, and the possible issuance of additional equity or debt securities to fund capital
expenditures and organic growth initiatives, to make acquisitions, to retire outstanding
indebtedness, and to possibly repurchase shares of our common stock as market and operation
conditions warrant.

The Company intends to secure the best possible returns from the use of its operating cash
flows. Towards this end the Company believes that its available cash resources can generate much
higher returns for its shareholders, by both reducing outstanding debt, and by investing in
accretive acquisitions and organic growth initiatives, rather than by issuing dividends. While the
Company does not completely rule out the possibility of issuing dividends in the future, at present
it is more inclined to use its cash to generate further improvement in future earnings.

We believe that anticipated cash flows provided by our operating activities, together with
current cash balances and access to our credit facilities and the capital markets, if required,
will be sufficient to meet our projected cash requirements for the next twelve months, and the
foreseeable future thereafter, although any projections of future cash needs, cash flows, and the
general market condition for credit and equity securities may be subject to substantial
uncertainty. In the event additional liquidity needs arise, we may raise funds from a combination
of sources, including the potential issuance of debt or equity securities.

We continue to strategically evaluate our ability to sell additional equity or debt
securities, to expand existing or obtain new credit facilities from lenders in order to strengthen
our financial position. The sale of additional equity or convertible debt securities could result
in additional dilution to our shareholders. We regularly evaluate our liquidity requirements,
including the need for additional debt or equity offerings, when considering potential business
acquisitions, development of new products or services, or the retirement of debt. During 2011 the
Company intends to utilize its cash and other financing resources towards making strategic
accretive acquisitions in
the insurance data exchange arena. However, there are no assurances that such financing
facilities will be available in amounts or on terms acceptable to us, if at all.

In February 2010 the Company entered into a new credit facility with Bank of America (BOA).
The financing was comprised of a two-year, $25 million secured revolving credit facility, and a $10
million secured term loan which amortizes over a two year period with quarterly principal and
interest payments that commenced on March 31, 2010 and a final payment of all remaining outstanding
principal and accrued interest due on February 12, 2012. The interest rate applicable to the entire
BOA credit facility is LIBOR plus 1.50%.

Our cash and cash equivalents were $23.4 million and $19.2 million at December 31, 2010 and
2009, respectively.

Our current ratio significantly improved during the past year and at December 31, 2010 it
stood at 1.56 as compared to 0.62 at December 31, 2009. The Company finished the year with
sufficient working capital to support our continued operating activities, which amounted to $21.7
million at December 31, 2010. The improvement in our short-term liquidity position is primarily the
result of the conversion of $20.0 million of previously carried convertible debt and the
refinancing of our financing facility with our commercial bank. We believe that our ability to
generate sustainable significant cash flows from operations will enable the Company to continue to
fund its current liabilities from current assets including available cash balances for the
foreseeable future.

Operating Activities

For the twelve months ended December 31, 2010, the Company generated $52.8 million of net cash
flow from operating activities compared to $33.9 million for the year ended December 31, 2009,
representing a 56% increase. The major sources of cash provided by our operating activities for
2010 was net income of $59.0 million, net of $(8.0) million of net non-cash gains recognized on
derivative instruments and foreign currency exchange, $(6.2) million of working capital
requirements primarily associated with payments of trade payables and increased outstanding trade
receivables, $6.0 million of depreciation and amortization, and $1.9 million of non-cash
compensation.

For the twelve months ended December 31, 2009, the Company generated $33.9 million of net cash
flow from operating activities which consisted of $38.8 million of net income net of $(10.2)
million in working capital requirements, $3.9 million of depreciation and amortization, and $1.4
million of non-cash compensation.

Investing Activities

Net cash used for investing activities totaled $24.4 million for the twelve months ended
December 31, 2010 of which $7.1 million was used for the September 2010 acquisition of USIX (net of
$324 thousand of cash acquired), $1.0 million was used for the July 2010 acquisition of E-Trek (net
of $62 thousand of cash acquired), $1.3 million was used for the May 2010 acquisition of Connective
Technologies (net of $0 cash acquired), $2.7 million was used for the April 2010 acquisition of
Trades Monitor (net of $0 cash acquired), and $2.9 million was used for the January 2010
acquisition of MCN (net of $172 thousand of cash acquired). Also during this past year $3.0
million was used to fulfill earn-out payment obligations to the former shareholders of ConfirmNet
(a 2008 business acquisition), $4.5 million was used towards investments in marketable securities
(specifically bank certificates of deposit), and $1.8 million was used for capital expenditures and
the purchases of operating equipment to enhance the performance of our technology platforms and to
support the continued growth of our businesses.

Net cash used for investing activities totaled $47.4 million for the twelve months ended
December 31, 2009 of which $7.9 million was used for the acquisition of Peak (net of $187 thousand
of cash acquired), $25.4 million was used for the cash consideration portion of the E-Z Data
acquisition purchase price (net of $206 of cash acquired), $6.2 million was used for acquisition of
Facts (net of $796 thousand of cash acquired), $1.0 million was used to fulfill earn-out payment
obligations to the former shareholders of IDS (a 2007 business acquisition), $3.3 million was used
to fulfill earn-out payment obligations to the former shareholders of ConfirmNet (a 2008 business
acquisition), $3.1 million was used for purchases of operating equipment, and $263 thousand was
used for investments in marketable securities (specifically bank certificates of deposit).

Net cash used for financing activities during the twelve months ended December 31, 2010 was
$25.7 million. This financing cash outflow was comprised of $22.5 million used for the settlement
of previously issued convertible debt instruments, $10.7 million was used to complete open market
repurchases of our common stock, and $804 thousand was used to service existing capital lease
obligations. Partially offsetting these financing cash outflows was $5.2 million of proceeds (net
of principal repayments) from our term loan facility with Bank of America, N.A. (BOA), $1.9
million of proceeds (net of $23.1 million of repayments) from our revolving credit facility with
BOA, and $1.2 million from the exercise of stock options.

During the twelve months ended December 31, 2009 net cash provided by financing activities was
$23.2 million. This financing cash inflow was comprised of $25.0 million from the proceeds of two
convertible debt issuances and $1.6 million from exercise of stock options. Partially offsetting
these financing cash inflows was $1.8 million of payments against our line of credit (net of $27.1
million of draws), $1.0 million that was used to service existing long-term debt and capital lease
obligations, and $507 thousand to complete open market repurchases of our common stock.

Commercial Bank Financing Facility

On February 12, 2010 the Company entered a credit agreement with Bank of America N.A. (BOA)
providing for a $35 million secured credit facility which is comprised of a two-year, $25 million
secured revolving credit facility, and a $10 million secured term loan which amortizes over a two
year period with quarterly principal and interest payments that commenced on March 31, 2010 and a
final payment of all remaining outstanding principal and accrued interest due on February 12, 2012.
The credit facility has a variable interest rate currently set at LIBOR plus 1.50%. The revolving
credit facility is used by the Company to partially satisfy working capital requirements primarily
in support of current operations, organic growth, and accretive business acquisitions. The
underlying financing agreement contains financial covenants regarding the Companys annualized
EBITDA, fixed charge coverage ratio, as well as certain restrictive covenants including the
incurrence of new debt and consummation of new business acquisitions. The Company is in full
compliance with all such financial and restrictive covenants and there have been no events of
default.

At December 31, 2010 the outstanding balance on the revolving line of credit was $25.0 million
and the facility carried an interest rate of 1.77%. This balance is included in the long-term
liabilities section of the Consolidated Balance Sheet. During the twelve month period ending
December 31, 2010 the average and maximum outstanding balance on the revolving line of credit was
$18.7 million and $25.0 million respectively

At December 31, 2010 the outstanding balance on the term loan was $5.0 million and it also
carried an interest rate of 1.77%. During the twelve months ended December 31, 2010 payments in
the aggregate amount of $5.0 million were made against the term loan. The balance of the term loan
is included in the current liabilities section of the Consolidated Balance Sheet.

On March 8, 2011 Ebix and Bank of America N.A. jointly executed a mutually binding commitment
letter to amend and expand the existing credit facility. The amended credit facility, which has
been expanded to $55 million, is comprised of a three-year $35 million secured revolving credit
facility, and a $20 million secured term loan which amortizes over a three year period with
quarterly principal and interest payments. The new $55 million credit facility replaces the former
$35 million facility that had been with the same lender. The initial interest rate applicable to
the credit facility is LIBOR plus 1.50%. The Company expects the closing date to formally execute
the associated credit facility agreement documents will be on or before April 15, 2011.

In August 2009 the Company issued three convertible promissory notes raising a total of $25.0
million. Specifically on August 26, 2009 the Company entered into a Convertible Note Purchase
Agreement with Whitebox in an original amount of $19.0 million, which amount is convertible into
shares of common stock at a conversion price of $16.00 per share. The note has a 0.0% stated
interest rate and no warrants were issued. The note is payable in full at its maturity date of
August 26, 2011. Also on August 26, 2009 the Company entered into a Convertible
Note Purchase Agreement with IAM Mini-Fund 14 Limited, a fund managed by Whitebox, in an
original amount of $1.0 million, which amount is convertible into shares of common stock at a
conversion price of $16.00 per share. The note has a 0.0% stated interest rate and no warrants were
issued. The note is payable in full at its maturity date of August 26, 2011. Finally, on August 25,
2009 the Company entered into a Convertible Note Purchase Agreement with the Rennes Foundation in
an original amount of $5.0 million, which amount is convertible into shares of common stock at a
conversion price of $16.66 per share. The note has a 0.0% stated interest rate and no warrants were
issued. The note is payable in full at its maturity date of August 25, 2011. The Company applied
imputed interest on these convertible notes using an interest rate of 1.75% and discounted their
carrying value accordingly. During the twelve months ending December 31, 2010 the Company
recognized $328 thousand of interest expense. With respect to each of these convertible notes, and
in accordance with the terms of the notes, as understood between the Company and each of the
holders, upon a conversion election by the holder the Company must satisfy the related original
principal balance in cash and may satisfy the conversion spread (that being the excess of the
conversion value over the related original principal component) in either cash or stock at option
of the Company. During 2010 Whitebox VSC, Ltd and IAM Mini-Fund 14 Limited elected to fully convert
all of their August 26, 2009 Convertible Promissory Notes. The Company settled these conversion
elections by paying $20 million in cash with respect to the principal component, paying $2.5
million in cash for a portion of the conversion spread, and issuing 283,378 shares of Ebix common
stock for the remainder of the conversion spread.

The Company previously had a $15.0 million convertible note with Whitebox, originally dated
July 11, 2008. On February 3, 2010, Whitebox fully converted the remaining principal on the $15
million note in the amount of $4.39 million and accrued interest in the amount of $62 thousand into
476,662 shares of the Companys common stock.

Furthermore, the Company also previously had $20.0 million convertible note with Whitebox
originally dated December 18, 2007. On October 7, 2009 the Company exercised its rights as
provided in the Agreement and elected to exercise its mandatory conversion option. Accordingly the
Company caused Whitebox to surrender the underlying 2.5% Secured Convertible Promissory Note due
December 18, 2009, and to convert the remaining principal on said Note in the amount of $5.3
million together with accrued interest thereon in the amount of $105 thousand into 762,810 shares
of the Companys common stock at the conversion price of $7.09 per share.

As of December 31, 2010 the total remaining amount of convertible debt was $5.0 million which
solely consists of a $5.0 million with Rennes Foundation. The unamortized discount was $56 thousand
as of December 31, 2010

Contractual Obligations and Commercial Commitments

The
following table summarizes our known contractual purchase obligations and other
long-term obligations as of December 31, 2010. The table excludes commitments that are contingent
based on events or factors uncertain at this time.

We do not believe that the rate of inflation has had a material effect on our operating
results. However, inflation could adversely affect our future operating results.

RECENT ACCOUNTING PRONOUNCEMENTS

The
following is a brief discussion of recently released accounting pronouncements that are
pertinent to the Companys business:

In December 2010, the Emerging Issues Task Force of the
FASB reached consensus regarding the disclosure of pro forma information for business combinations. This new guidance addressed the
diversity in practice concerning the interpretation of the pro forma revenue and earnings disclosure requirements for business
combinations. The guidance specifies that if a public entity presents comparative financial statements, the entity should disclose
revenue and earnings of the combined entity as though the business combination had occurred as of the beginning of the comparable
prior annual reporting period only. The amendments also expand the supplemental pro forma disclosures to include a description
of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included
in the reported pro forma revenue and earnings. The amendments affect any public entity that enters into business combinations that
are material on an individual or aggregate basis. The new guidance is applicable to business combinations for which the acquisition
date is on or after the first annual reporting period beginning on or after December 15, 2010. The Company is adopting this new
guidance in the first quarter of 2011 and will apply this guidance to our recent acquisition of ADAM, completed in February 2011.

In January 2010, the FASB issued new guidance
regarding disclosures about fair value measurements. The guidance requires additional disclosures and clarifies some existing
disclosure requirements about fair value measurement as set forth in earlier related guidance. Specifically this new guidance
now requires a reporting entity to disclose separately the amounts of significant transfers in and out of Level 1 and Level 2
fair value measurements and describe the reasons for the transfers; and for fair value measurements using significant unobservable
inputs, a reporting entity should present separately information about purchases, sales, issuances, and settlements. Also a reporting
entity should provide disclosures about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring
fair value measurements. This new guidance is effective for interim and annual reporting periods beginning after December 15, 2009,
except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value
measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within
those fiscal years. Early application is permitted. The Company adopted and applied this pronouncement during its current year
ending December 31, 2010.

In September 2009, FASB issued amended revenue recognition guidance related to revenue
arrangements with multiple deliverables. This new pronouncement: (a) provides application guidance
on whether multiple deliverables exist in an arrangement with a customer, and if so, how the
arrangement consideration should be separated and allocated; (b) requires an entity to allocate
revenue using estimated selling prices of deliverables if vendor-specific objective evidence
(VSOE) or third party evidence (TPE) of selling prices is not available; and, (c) eliminates
the use of the residual method to allocate revenue. This guidance is to be applied on a
prospective basis for revenue arrangements entered into in fiscal years beginning on or after June
15, 2010, with earlier application permitted. Alternatively, an entity can elect to adopt new
guidance on a retrospective basis. The Company is adopting this new guidance in the first quarter
of 2011.

Also in September 2009, the FASB issued new guidance related to certain revenue arrangements
that include software elements which removes tangible products from the scope of previously issued
authoritative guidance on software revenue recognition and provides guidance on determining whether
software deliverables in an arrangement that include tangible products are within the scope of
existing software revenue guidance. This guidance is to be applied on a prospective basis for
revenue arrangements entered into in fiscal years beginning on or after June 15, 2010, with earlier
application permitted. Alternatively, an entity can elect to adopt new guidance on a retrospective
basis. The Company will adopt this new guidance in 2011 but does not expect its adoption to have a
material impact on our consolidated financial position, results of operations or cash flows, as the
sale of tangible products are not a significant component of the Companys revenues.

In December 2007, the FASB issued new accounting guidance pertaining to the accounting for
business combinations and related disclosures. This new guidance addresses the recognition and
accounting for identifiable assets acquired, liabilities assumed, and non-controlling interests in
business combinations. The guidance also establishes expanded disclosure requirements for business
and improves the relevance, representational faithfulness, and comparability of the information
that a reporting entity provides in its financial reports about a business combination and its
effects. The guidance was effective for fiscal years beginning after December 15, 2008, and we
applied this new pronouncement to each of our business acquisitions consummated during both the
years ending December 31, 2010 and 2009.

The preparation of financial statements in conformity with generally accepted accounting
principles (GAAP), as promulgated in the United States, requires our management to make estimates
and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses
and related disclosures of contingent assets and liabilities in our Consolidated Financial
Statements and accompanying notes. We believe the most complex and sensitive judgments, because of
their significance to the Consolidated Financial Statements, result
primarily from the need to make estimates and assumptions about the effects of matters that
are inherently uncertain. The following accounting policies involve the use of critical accounting
estimates because they are particularly dependent on estimates and assumptions made by management
about matters that are uncertain at the time the accounting estimates are made. In addition, while
we have used our best estimates based on facts and circumstances available to us at the time,
different estimates reasonably could have been used in the current period, or changes in the
accounting estimates that we used are reasonably likely to occur from period to period which may
have a material impact on our financial condition and results of operations. For additional
information about these policies, see Note 1 of the Notes to the Consolidated Financial Statements
in this Form 10-K. Although we believe that our estimates, assumptions and judgments are
reasonable, they are limited based upon information presently available. Actual results may differ
significantly from these estimates under different assumptions, judgments or conditions.

Revenue Recognition

The Company derives its revenues primarily from professional and support services, which
includes subscription and transaction fees pertaining to services delivered over our exchanges or
from our ASP platforms, revenue generated from software development projects and associated fees
for consulting, implementation, training, and project management provided to customers with
installed systems, and business process outsourcing revenue. Sales and value-added taxes are not
included in revenues, but rather are recorded as a liability until the taxes assessed are remitted
to the respective taxing authorities.

In accordance with Financial Accounting Standard Board (FASB) and Securities and Exchange
Commission Staff Accounting (SEC) accounting guidance on revenue recognition the Company considers
revenue earned and realizable when: (a) persuasive evidence of the sales arrangement exists, (b)
the arrangement fee is fixed or determinable, (c) service delivery or performance has occurred, (d)
customer acceptance has been received, if contractually required, and (e) collectability of the
arrangement fee is probable. The Company typically uses signed contractual agreements as persuasive
evidence of a sales arrangement. We apply the provisions of the relevant FASB accounting
pronouncements when making estimates or assumptions related to transactions involving the license of software where the software
deliverables are considered more than inconsequential to the other elements in the arrangement. For
contracts that contain multiple deliverables, we analyze the revenue arrangements
when making estimates or assumptions in accordance
with the appropriate authoritative guidance, which provides criteria governing how to determine
whether goods or services that are delivered separately in a bundled sales arrangement should be
considered as separate units of accounting for the purpose of revenue recognition. Deliverables are
accounted for separately if they meet all of the following criteria: (a) the delivered item has
value to the customer on a stand-alone basis; (b) there is objective and reliable evidence of the
fair value of the undelivered items; and (c) if the arrangement includes a general right of return
relative to the delivered items, the delivery or performance of the undelivered items is probable
and substantially controlled by the Company.

The Company begins to recognize revenue from license fees for its ASP products upon delivery
and the customers acceptance of the software implementation and customizations if necessary and
applicable. Transaction services fee revenue for this use of our exchanges or ASP platforms is
recognized as the transactions occur and are generally billed in arrears. Service fees for hosting
arrangements are recognized over the requisite service period. Revenue derived from the licensing
of third party software products in connection with sales of the Companys software licenses and is
recognized upon delivery together with the Companys licensed software products. Training, data
conversion, installation, and consulting services fees are recognized as revenue when the services
are performed. Revenue for maintenance and support services is recognized ratably over the term of
the support agreement. Revenues derived from initial setup or registration fees are recognized
ratably over the term of the agreement in accordance with FASB and SEC accounting guidance on
revenue recognition.

Deferred revenue includes maintenance and support payments or billings that have been received
and recorded prior to performance and, in certain cases, cash collections; initial setup or
registration fees under hosting agreements; software license fees received in advance of delivery,
acceptance, and/or completion of the earnings process; and amounts received under multi-element
arrangements in which objective evidence of the fair value for the undelivered elements does not
exist. In these instances revenue is recognized when the fair value of the undelivered elements is
determinable or when all contractual elements have been completed and delivered.

Management specifically analyzes accounts receivable and historical bad debts, write-offs,
customer concentrations, customer credit-worthiness, current economic trends and changes in our
customer payment terms when evaluating uncertainties and estimate as to the collectability of
outstanding accounts receivable and the adequacy of the Companys recorded allowance for doubtful
accounts.

Valuation of Goodwill

Goodwill represents the cost in excess of the fair value of the identifiable net assets of
acquired businesses. The Company applies the provisions of the FASBs accounting guidance on
goodwill and other intangible assets which addresses how goodwill and other acquired intangible
assets should be accounted for in financial statements. In this regard we test these intangible
assets for impairment annually or more frequently if indicators of potential impairment are
present. Such potential impairment indicators include a significant change in the business climate,
legal factors, operating performance indicators, competition, and the sale or disposition of a
significant portion of the business. The testing involves comparing the reporting unit and
intangible asset carrying values to their respective fair values; we determine fair value by
applying the discounted cash flow method using the present value of future estimated net cash
flows. The cash flow projections are based on our views of growth rates, anticipated future
economic conditions and the appropriate discount rates relative to risk and estimates of residual
values. We believe that our estimates are consistent with assumptions that marketplace participants
would use in their estimates of fair value. The use of different estimates or assumptions for our
projected discounted cash flows (e.g., growth rates, future economic conditions, discount rates and
estimates of terminal values) when determining the fair value of our reporting units could result
in different values and may result in a goodwill impairment charge. During the twelve months ended
December 31, 2010, 2009, and 2008, we had no impairment of our reporting unit goodwill balances.
For additional information about goodwill, see Note 1 of the Notes to Consolidated Financial
Statements in this Form 10-K.

Income Taxes

We account for income taxes in accordance with FASB accounting guidance on the accounting and
disclosure of income taxes, which involves estimating the Companys current tax exposure together
with assessing temporary differences resulting from differing treatment of items for tax and
accounting purposes. These differences result in deferred tax assets and liabilities, which are
included in our Consolidated Balance Sheets. We then assess the likelihood that our net deferred
tax assets will be recovered from future taxable income in the years in which those temporary
differences are expected to be recovered or settled, and, to the extent we believe that recovery is
not likely, we establish a valuation allowance. In this regard a valuation allowance in the amount
of $6.6 million is being maintained to fully offset the deferred tax assets associated with
cumulative NOLs that were obtained in connection with previous business acquisitions and for which
realization of these assets is not assured due to uncertainties principally associated with
limitations on the usage of these acquired NOLs posed by Section 382 of the U.S. internal revenue
code.

The Company has not provided deferred U.S. taxes on its unremitted foreign earnings because it
considers them to be permanently re-invested.

The Company follows the provisions of FASB accounting guidance on accounting for uncertain
income tax positions. This guidance clarified the accounting for uncertainty in income taxes by
prescribing the minimum recognition threshold a tax position is required to meet before being
recognized in the financial statements. The guidance utilizes a two-step approach for evaluating
tax positions. Recognition (Step 1) occurs when an enterprise concludes that a tax position,
based solely on its technical merits is more likely than not to be sustained upon examination.
Measurement (Step 2) is only addressed if Step 1 has been satisfied. Under Step 2, the tax
benefit is measured at the largest amount of benefit, determined on a cumulative probability basis
that is more likely than not to be realized upon final settlement.

Our reporting currency is the U.S. dollar. The functional currency of the Companys foreign
subsidiaries is the local currency of the country in which the subsidiary operates. The assets and
liabilities of foreign subsidiaries are translated into U.S. Dollars at the rates of exchange at
the balance sheet dates. Income and expense accounts are
translated at the average exchange rates in effect during the period. Gains and losses
resulting from translation adjustments are included as a component of other comprehensive income in
the accompanying consolidated financial statements. Foreign exchange transaction gains and losses
that are derived from transactions denominated in other than the subsidiarys functional currency
is included in the determination of net income.

Quarterly Financial Information (unaudited):

The following is the unaudited quarterly financial information for 2010, 2009 and 2008:

The Company is subject to certain market risks, including foreign currency exchange rates and
interest rates. The Companys exposure to foreign currency exchange rates risk is related to our
foreign-based operations where transactions are denominated in foreign currencies and are subject
to market risk with respect to fluctuations in the relative value of those currencies. A majority
of the Companys operations are based in the U.S. and, accordingly, a large component of our
business transactions are denominated in U.S. dollars, however, the Company has operations in
Australia, New Zealand, Singapore, and India, and we conduct transactions in the local currencies
of each location. There can be no assurance that fluctuations in the value of those foreign
currencies will not have a material adverse effect on the Companys business, operating results,
revenues or financial condition. During the years of 2010, 2009, and 2008 the net change in the
cumulative foreign currency translation account, which is a component of stockholders equity, was
an unrealized gain (loss) of $6.5 million, $11.5 million, and $(15.1) million, respectively. The
Company considered the historical trends in currency exchange rates and determined that it was
reasonably possible that adverse changes in our respective foreign currency exchange rates of 20%
could possibly be experienced in the near term future. Such an adverse change in currency exchange
rates would have resulted in reduction to pre-tax income of approximately $3.5 million, $2.6
million and $2.9 million for the years ended December 31, 2010, 2009 and 2008, respectively.

The Companys exposure to interest rate risk relates to its interest expense on outstanding
debt obligations and to its interest income on existing cash balances. As of December 31, 2010 the
Company had $35.2 million of outstanding debt obligations which consisted of a $25.0 million
balance on our commercial banking revolving line of credit, a $5 million secured term loan, a $5.0
million convertible promissory note with Rennes, and a $157 thousand revolving line of credit with
Banco Santander (Brazil) S.A. The Companys major revolving line of credit bears interest at the
rate of LIBOR + 1.50%, and stood at 1.77% at December 31, 2010. The Company is exposed to market
risk in relation to this line of credit in regards to the potential increase to interest expense
arising from adverse changes in interest rates. This interest rate risk is estimated as the
potential decrease in earnings resulting from a hypothetical 30% increase in the LIBOR rate. Such
an adverse change in the LIBOR rate would have resulted in a reduction to pre-tax income of
approximately $23 thousand and $28 thousand for the years ending December 31, 2010 and 2009,
respectively. The Companys average cash balances during 2010 were $19.2 million and its existing
cash balances as of December 31, 2010 was $23.4 million. The Company is exposed to market risk in
relation to these cash balances in regards to the potential loss of interest income arising from
adverse changes in interest rates. This interest rate risk is estimated as the potential decrease
in earnings resulting from a hypothetical 20% decrease in interest rates earned on deposited funds.
Such an adverse change in these interest rates would have resulted in a reduction to pre-tax income
of approximately $104 thousand and $40 thousand for the years ended December 31, 2010 and 2009,
respectively.

During the years ended December 31, 2010 and 2009, we entered into a series of one-year
forward foreign exchange contracts to hedge the intercompany receivables originated by our Indian
subsidiary that are denominated in United States dollars. These U.S dollars/Indian rupee hedges are
intended to partially offset the impact of movement in exchange rates on future operating costs,
and to reduce the risk that our earnings and cash flows will be adversely affected by changes in
U.S dollars/Indian rupee currency exchange rate. As of December 31, 2010, the notional value of
these contracts which are scheduled to mature in March and September 2011 is $23.3 million. Changes
in the fair value of these derivative instruments are recognized in our consolidated income
statement. We use these instruments as economic hedges, intended to mitigate the effects of changes
in foreign exchange rates, and not for speculative purposes. These derivative instruments do not
subject us to material balance sheet risk due to exchange rate movements because gains and losses
on these derivatives are do significantly offset gains and losses on the intercompany receivables
being hedged. For the twelve months ended December 31, 2010 and 2009, we recognized a gain of $1.3
million and $498 thousand, respectively, included in Foreign exchange gain in the consolidated
statements of income. Based upon a sensitivity analysis performed against our forward foreign
exchange contracts at December 31, 2010 and 2009, which measures the hypothetical change in the
fair value of the contracts resulting from 20% shift in the value of exchange rates of the Indian
rupee relative to the U.S. dollar, a 20% appreciation in the U.S. dollar against the Indian rupee
(and a corresponding increase in the value of the hedged assets) would lead to a decrease in the
fair value of our forward foreign exchange contracts by $3.7 million and $2.2 million,
respectively. Conversely, a 20% depreciation in the U.S. dollar against the Indian rupee would lead
to an increase in the fair value of our forward foreign exchange contracts by $5.6 million and $3.3
million. We regularly review our hedging strategies and may in the future, as a part of this
review, determine the need to change our hedging activities.

During the year ending December 31, 2009 in connection with the acquisition of E-Z Data the
Company issued a put option to the sellers, with respect to the shares of Ebix common stock that
were issued as part of the acquisition consideration, which is exercisable during the thirty-day
period immediately following the two-year anniversary date of the business acquisition, which if
exercised would enable them to sell the shares back to the Company at a price of $15.11 per share,
which represents a 10% discount off of the per-share value established on the effective date of the
closing of Ebixs acquisition of E-Z Data. Using a Black-Scholes model we determined that the
initial fair value for the put option was $6.6 million and that its fair value on December 31, 2010
and 2009 had decreased by $6.1 million and $89 thousand, respectively. The inputs used in the
valuation of the put option include term, stock price volatility, current stock price, exercise
price, and the risk free rate of return, with the volatility factor being the input subject to the
most variation. Therefore, as pertaining to the put option, the Company is exposed to market risk
as regarding the rate and magnitude of change of our stock price and corresponding variances to the
volatility factor used in the Black-Scholes valuation model. We evaluated this risk by estimating
the potential adverse impact of a 10% increase in the volatility factor and determined that such a
change in the volatility factor would have resulted in an approximate $200 thousand and $700
thousand increase to the put option liability and a corresponding reduction to pre-tax income as of
and for the years ended December 31, 2010 and 2009, respectively.

Item 8:

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See also the Quarterly Financial Information included under Item 7: Managements Discussion
and Analysis of Financial Condition and Results of Operations.

We have audited the accompanying consolidated balance sheets of Ebix, Inc. and subsidiaries (the
Company) as of December 31, 2010 and 2009, and the related consolidated statements of income,
stockholders equity and comprehensive income, and cash flows for each of the three years in the
period ended December 31, 2010. We have also audited the accompanying consolidated financial
statement schedule for the years ended December 31, 2010, 2009 and 2008 listed in the index at Item
15. These consolidated financial statements and schedule are the responsibility of the Companys
management. Our responsibility is to express an opinion on these consolidated financial statements
and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and schedule are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements and schedule. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a reasonable basis for
our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all
material respects, the financial position of Ebix, Inc. and subsidiaries at December 31, 2010 and
2009 and the results of their operations and their cash flows for each of the three years in the
period ended December 31, 2010, in conformity with accounting principles generally accepted in the
United States of America. Also, in our opinion, the related consolidated financial statement
schedule for the years ended December 31, 2010, 2009, and 2008 when considered in relation to the
basic consolidated financial statements taken as a whole, presents fairly, in all material
respects, the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight
Board (United States), the Companys internal control over financial reporting as of December 31,
2010, based on criteria established in Internal Control-Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated March
16, 2011 expressed an unqualified opinion thereon.

During 2010 Whitebox VSC, Ltd and IAM Mini-Fund 14 Limited elected to fully convert all of their
August 26, 2009 Convertible Promissory Notes. The Company settled these conversion elections by
paying $20 million in cash with respect to the principal component, paying $2.5 million in cash for
a portion of the conversion spread (that being the excess of the conversion value over the related
original principal component), and issuing 283,378 shares of Ebix common stock for the remainder of
the conversion spread.

During the year ended December 31, 2010 Whitebox VSC, Ltd., converted the remaining $4.4 million of
outstanding principal and accrued interest in the amount of $62 thousand regarding their July 11,
2008 Convertible Promissory Note into 476,662 shares of Ebix common stock.

During the year ended December 31, 2009 the holder of the convertible notes, Whitebox VSC, Ltd.,
converted $22.3 million of principal and accrued interest into 2,790,186 shares of the Companys
common stock.

During the year ended December 31, 2009 the Company issued shares of common stock valued at $25.0
million in connection with the acquisition of E-Z Data.

During the year ended December 31, 2008 the holder of the convertible notes, Whitebox VSC, Ltd.,
converted $8.6 million of principal and accrued interest into 405,897 shares of the Companys
common stock.

Note 1: Description of Business and Summary of Significant Accounting Policies

Description of BusinessEbix, Inc. and subsidiaries (Ebix or the Company) provides a
series of software products for the insurance and financial industries ranging from carrier
systems, agency systems and exchanges to custom software development for carriers, brokers, and
agents. Products include data exchanges, carrier systems, agency systems, and feature fully
customizable and scalable on-demand software designed to improve the way insurance professionals
manage all aspects of distribution, including: marketing, sales, service, accounting and
management. The Company has its headquarters in Atlanta, Georgia and also operated in eight other
countries during 2010 including Australia, Canada, China, India, Japan, New Zealand, Singapore, and
Brazil. International revenue accounted for 29%, 25% and 35% of total revenue in 2010, 2009 and
2008, respectively.

The Companys revenues are derived from four product channels. Presented in the table below is
the breakout of our revenue streams for each of those product channels the years ended December 31,
2010, 2009, and 2008.

For the Year Ended

December 31,

(dollar amounts in thousands)

2010

2009

2008

Carrier Systems

$

8,549

$

10,624

$

11,314

Exchanges

$

94,212

$

60,764

$

42,711

Business Process Outsourcing (BPO)

$

15,586

$

14,698

$

8,380

Broker Systems

$

13,841

$

11,599

$

12,347

Totals

$

132,188

$

97,685

$

74,752

Summary of Significant Accounting Policies

Basis of PresentationThe consolidated financial statements include the accounts of Ebix and
its wholly-owned subsidiaries which include:

The effect of inter-company balances and transactions has been eliminated.

Use of
EstimatesThe preparation of consolidated financial
statements in conformity with generally accepted accounting principles in the United States of America
requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the dates of the financial statements and reported amounts of revenue and expenses
during the reporting periods. Management has made material estimates primarily with respect to
revenue recognition and deferred revenue, accounts receivable, acquired intangible assets, and the
provision for income taxes. Actual results may be materially different from those estimates.

Segment ReportingSince the Company, from the perspective of its chief operating decision
maker, allocates resources and evaluates business performance as a single entity that provides
software and related services to a single industry on a worldwide basis, the Company reports as a
single segment. The applicable enterprise-wide disclosures are
included in Note 16.

Cash and Cash EquivalentsThe Company considers all highly liquid investments with an
original maturity of three months or less at the time of purchase to be cash equivalents. Such
investments are stated at cost, which approximates fair value. The Company does maintain cash
balances in banking institutions in excess of federally insured amounts and therefore is exposed to
the related potential credit risk associated with such cash deposits.

Short-term InvestmentsThe Companys short-term investments consist of certificates of
deposits with established commercial banking institutions with readily determinable fair values.
Ebix accounts for investments that are reasonably expected to be realized in cash, sold or consumed
during the year as short-term investments that are available-for-sale. The carrying amount of
investments in marketable securities approximates fair value. The carrying value of our short-term
investments was $6.3 million and $1.8 million at December 31, 2010 and 2009 respectively.

Fair Value of Financial InstrumentsThe Company follows the relevant FASB and GAAP guidance
regarding the determination and measurement of the fair value of
financial instruments in which fair
value is defined as the exchange price that would be received for an asset or paid to transfer a
liability (an exit price) in the principal or most advantageous market for the asset or liability
in an orderly transaction value hierarchy which requires an entity to maximize the use of
observable inputs when measuring fair value. The guidance describes the following three levels of
inputs that may be used in the methodology to measure fair value:



Level 1  Quoted prices available in active markets for identical investments
as of the reporting date;



Level 2  Inputs other than quoted prices in active markets, which are either
directly or indirectly observable as of the reporting date; and,



Level 3  Unobservable inputs, which are to be used in situations where there
is little or no market activity for the asset or liability and wherein the reporting entity
makes estimates and assumptions related to the pricing of the asset or liability including
assumptions regarding risk.

A financial instruments level within the fair value hierarchy is based on the lowest level of any
input that is significant to the fair value measurement.

The Company has the following financial instruments to which it had to consider fair values
and had to make fair assessments:



Foreign currency hedges for which the fair values are measured as a Level 2 instrument.



Common share-based put option for which the fair value is measured as Level 2
instrument.



Short-term investments for which the fair values are measured as a Level 1 instrument.

The Company
believes the carrying amount of its commercial line of credit, term
loan, convertible debt (net of discount), and capital lease obligations are a reasonable estimate of their fair value due to the short remaining
maturity of these items and/or their fluctuating interest rates.

Revenue Recognition and Deferred RevenueThe Company derives its revenues primarily from
professional and support services, which includes revenue generated from software development
projects and associated fees for consulting, implementation, training, and project management
provided to customers with installed systems, subscription and transaction fees pertaining to
services delivered over our exchanges or from our application service provider (ASP) platforms,
and business process outsourcing revenue. Sales and value-added taxes are not included in revenues,
but rather are recorded as a liability until the taxes assessed are remitted to the respective
taxing authorities.

In accordance with FASB and Securities and Exchange Commission Staff Accounting (SEC)
accounting guidance on revenue recognition the Company considers revenue earned and realizable
when: (a) persuasive evidence of the sales arrangement exists, (b) the arrangement fee is fixed or
determinable, (c) service delivery or performance has occurred, (d) customer acceptance has been
received, if contractually required, and (e) collectability of the arrangement fee is probable. The
Company typically uses signed contractual agreements as persuasive evidence of a sales arrangement.
We apply the provisions of the relevant FASB accounting pronouncements related to all transactions
involving the license of software where the software deliverables are considered more than
inconsequential to the other elements in the arrangement. For contracts that contain multiple
deliverables, we analyze the revenue arrangements in accordance with the appropriate authoritative
guidance, which provides criteria governing how to determine whether goods or services that are
delivered separately in a bundled sales arrangement should be considered as separate units of
accounting for the purpose of revenue recognition. Deliverables are accounted for separately if
they meet all of the following criteria: a) the delivered item has value to the customer on a
stand-alone basis; b) there is objective and reliable evidence of the fair value of the undelivered
items; and c) if the arrangement includes a general right of return relative to the delivered
items, the delivery or performance of the undelivered items is probable and substantially
controlled by the Company.

The Company begins
to recognize revenue from license fees for its ASP products upon
granting customer access to the respective ASP platform.
Transaction services fee revenue for this use of our exchanges or ASP platforms is recognized as
the transactions occur and are generally billed in arrears. Revenues from BPO arrangements, which
include call center services, services are primarily performed on a time and material basis, and
insurance certificate creation and tracking services are recognized the services are performed.
Service fees for hosting arrangements are recognized over the requisite service period. Revenue
derived from the licensing of third party software products in connection with sales of the
Companys software licenses and is recognized upon delivery together with the Companys licensed
software products. Training, data conversion, installation, and consulting services fees are
recognized as revenue when the services are performed. Revenue for maintenance and support services
is recognized ratably over the term of the support agreement. Revenues derived from initial setup
or registration fees are recognized ratably over the expected term of
the relationship with the customer.

Software development arrangements involving significant customization, modification or
production are accounted for in accordance with the appropriate technical accounting guidance
issued by the FASB using the percentage-of-completion method. The Company recognizes revenue using
periodic reported actual hours worked as a percentage of total expected hours required to complete
the project arrangement and applies the percentage to the total arrangement fee.

Deferred revenue includes maintenance and support payments or billings that have been received
and recorded prior to performance and, in certain cases, cash collections; initial setup or
registration fees under hosting agreements; software license fees received in advance of delivery,
acceptance, and/or completion of the earnings process; and amounts received under multi-element
arrangements in which objective evidence of the fair value for the undelivered elements does not
exist. In these instances revenue is recognized when the fair value of the undelivered elements is
determinable or when all contractual. Approximately $5.0 million and $4.1 million of deferred
revenue were included in accounts receivable at December 31, 2010 and 2009 respectively.

Costs of Services ProvidedCosts of services provided consist of data processing costs,
customer support costs including personnel costs to maintain our proprietary databases, costs to
provide customer call center support, hardware and software expense associated with transaction
processing systems, telecommunication and computer network expense, and occupancy costs associated
with facilities where these functions are performed. Depreciation expense is not included in costs
of services provided.

Goodwill and Indefinite-Lived Intangible Assets Goodwill represents the cost in excess of
the fair value of the identifiable net assets of acquired businesses. In accordance with the
relevant FASB accounting guidance goodwill is tested for impairment at the reporting unit level on
an annual basis or on an interim basis if an event occurred or circumstances change that would
indicate that fair value of a reporting unit below decreased below its carrying value. Potential
impairment indicators include a significant change in the business climate, legal factors,
operating performance indicators, competition, and the sale or disposition of a significant portion
of the business. The testing involves comparing the reporting unit and intangible asset carrying
values to their respective fair values; we determine fair value by applying the discounted cash
flow method using the present value of future estimated net cash flows. If the fair value of a
reporting unit exceeds its carrying value, then no further testing is required. However, if a
reporting units fair value were to be less than its carrying value, we would then determine the
amount of the impairment charge, if any, which would be the amount that the carrying value of the
reporting units goodwill exceeded its implied value. Projections of cash flows are based on our
views of growth rates, anticipated future economic conditions and the appropriate discount rates
relative to risk and estimates of residual values. We believe that our estimates are consistent
with assumptions that marketplace participants would use in their estimates of fair value. The use
of different estimates or assumptions for our projected discounted cash flows (e.g., growth rates,
future economic conditions, discount rates and estimates of terminal values) when determining the
fair value of our reporting units could result in different values and may result in a goodwill
impairment charge. We perform our
annual goodwill impairment test as of September 30 each year. During the years ended December
31, 2010, 2009, and 2008, we had no impairment of our reporting unit goodwill balances.

During 2010 the
Company recorded $19.2 million of goodwill in connection with the recent
acquisitions of MCN Technology & Consulting (MCN),
Trades Monitor Australia Pty (Trades Monitor), Connective
Technologies, Inc.
(Connective Technologies), E-Trek Solutions PTE Ltd, (E-Trek), and USIX
Technology, S.A.
During 2009 the Company recorded $56.0 million of goodwill in connection with the recent
acquisitions of E-Z Data, Inc. (E-Z Data), Peak Performance Solutions, Inc.
(Peak), and Facts
Services, Inc. (Facts) and $4.1 million of additional
goodwill with regards to contingent earnout obligations associated
with business acquisitions we made in 2008.

Changes in the carrying amount of goodwill for the year ended December 31, 2010 and December
31, 2009 are as follows:

December 31,

December 31,

2010

2009

(In thousands)

Beginning Balance

$

157,245

$

88,488

Additions

19,211

60,118

Foreign currency translation adjustments

4,146

8,639

Ending Balance

$

180,602

$

157,245

The Companys indefinite-lived assets are associated with the estimated fair value of the
contractual customer relationships existing with the property and casualty insurance carriers in
Australia using our property and casualty (P&C) data exchange and with ten corporate customers
using our client relationship management (CRM) platform in the United States. Prior to the
underlying business acquisitions Ebix had contractual relationships with these carriers and
corporate clients. The contracts are renewable at little or no cost, and Ebix intends to continue
to renew these contracts indefinitely and has the ability to do so. The proprietary technology
supporting the data exchange and CRM platform, and used to deliver services to these carriers and
corporate clients cannot feasibly be effectively replaced in the foreseeable future, and
accordingly the cash flows forthcoming from these customers are expected to continue indefinitely.
With respect to the determination of the indefinite life, the Company considered the expected use
of these intangible assets, historical experience in renewing or extending similar arrangements,
and the effects of competition, and concluded that there were no indications from these factors to
suggest that the expected useful life of these customer relationships would be finite. The Company
concluded that no legal, regulatory, contractual, or competitive factors limited the useful life
these intangible assets and therefore their life was considered to be indefinite, and accordingly
the Company expects these customer relationships to remain the same for the foreseeable future. The
fair values of these indefinite-lived intangible assets were based on the analysis of discounted
cash flow (DCF) models extended out fifteen to twenty years. In that indefinite-lived does not
imply an infinite life, but rather means that the subject customer relationships are expected to
extend beyond the foreseeable time horizon, we utilized fifteen to twenty year DCF projections, as
the valuation models that were applied consider a fifteen to twenty year time frame to be an
indefinite period. Indefinite-lived intangible assets are not amortized, but rather are tested for
impairment annually. We perform our annual impairment testing of indefinite-lived intangible assets
as of September 30th of each year. During the years ended December 31, 2010, 2009, and 2008, we had
no impairments to the recorded balances of our indefinite-lived intangible assets. We perform the
impairment test for our indefinite-lived intangible assets by comparing the assets fair value to
its carrying value. An impairment charge is recognized if the assets estimated fair value is less
than its carrying value. In connection with the acquisition of Telstra during the first quarter of
2008 and the related purchase price allocation, an indefinite-lived asset in the amount of $14.7
million was recorded with respect to the contractual customer relationships existing with the
property and casualty insurance carriers in Australia. In connection with the acquisition of E-Z
Data during the fourth quarter of 2009 and the related purchase price allocation, an
indefinite-lived asset in the amount of $14.2 million was recorded with respect to the contractual
customer relationships existing with corporate customers using our CRM platform in the United
States.

Purchased Intangible AssetsPurchased intangible assets represent the estimated fair value of
acquired intangible assets through synergistic combination of the business that we purchase in the
U.S. and foreign countries in which we operate. These purchased intangible assets include customer
relationships, developed technology, and trademarks acquired. We amortize these intangible assets
on a straight-line basis over their estimated useful lives, as follows:

Life

Category

(yrs)

Customer relationships

4-20

Developed technology

3-10

Trademarks

5-10

Non-compete agreements

5

Database

10

Intangible assets for the year ended December 31, 2010 and December 31, 2009 are as follows:

December 31,

2010

2009

(In thousands)

Intangible assets:

Customer relationships

$

24,001

$

19,773

Developed technology

9,343

7,935

Trademarks

218

218

Non-compete agreements

418

418

Backlog

140

140

Database

213



Total intangibles

34,333

28,484

Accumulated amortization

(11,759

)

(7,979

)

Intangibles, net

$

22,574

$

20,505

Indefinite-lived intangibles:

Customer/territorial relationships

$

30,552

$

29,223

Income Taxes The Company follows the asset and liability method of accounting for income
taxes pursuant to the pertinent guidance issued by the FASB. Deferred income taxes are recorded to
reflect the tax consequences on future years of differences between the tax basis of assets and
liabilities, and operating loss and tax credit carry forwards, and their financial reporting
amounts at each period end using enacted tax rates expected to apply to taxable income in the years
in which those temporary differences are expected to be recovered or settled. In assessing the
realizability of the deferred tax assets, management considers whether it is more likely than not
that some portion or all of the deferred tax assets will not be realized. A valuation allowance is
recorded for the portion of the deferred tax assets that are not expected to be realized based on
the levels of historical taxable income and projections for future taxable income over the periods
in which the temporary differences will be deductible.

The Company follows the provisions of FASB accounting guidance on accounting for uncertain
income tax positions. The guidance utilizes a two-step approach for evaluating tax positions.
Recognition (Step 1) occurs when an enterprise concludes that a tax position, based solely on its
technical merits is more likely than not to be sustained upon examination. Measurement (Step 2)
is only addressed if Step 1 has been satisfied. Under Step 2, the tax benefit is measured at the
largest amount of benefit, determined on a cumulative probability basis that is more likely than
not to be realized upon final settlement. As used in this context, the term more likely than not
is interpreted to mean that the likelihood of occurrence is greater than 50%.

Foreign Currency TranslationThe functional currency of the Companys foreign
subsidiaries is generally the local currency of the country in which the subsidiary operates. The
assets and liabilities of foreign subsidiaries are translated into U.S. Dollars at the rates of
exchange at the balance sheet dates. Income and expense accounts are translated at the average
exchange rates in effect during the period. Gains and losses resulting from translation adjustments
are included as a component of other comprehensive income in the accompanying consolidated balance
sheets. Foreign exchange transaction gains and losses that are derived from transactions
denominated in a currency other than the subsidiarys functional currency are included in the
determination of net income.

AdvertisingAdvertising costs are expensed as incurred. Advertising costs amounted to
$973 thousand, $548 thousand and $413 thousand in 2010, 2009 and 2008, respectively, and are
included in sales and marketing expenses in the accompanying consolidated statements of income.

Property and EquipmentProperty and equipment is stated at cost less accumulated depreciation
and amortization. Depreciation and amortization are computed using the straight-line method over
the assets estimated useful lives. Leasehold improvements are amortized over the shorter of the
expected life of the improvements or the remaining lease term. Repairs and maintenance are charged
to expense as incurred and major improvements that extend the life of the asset are capitalized and
depreciated over the expected life remaining life of the related asset. Gains and losses resulting
from sales or retirements are recorded as incurred, at which time related costs and accumulated
depreciation are removed from the Companys accounts. Fixed assets acquired in acquisitions are
recorded at fair value. The estimated useful lives applied by the Company for property and
equipment are as follows:

Life

Asset Category

(yrs)

Computer equipment

5

Furniture, fixtures and other

7

Buildings

30

Leasehold improvements

Life of the lease

Recent Accounting Pronouncements

The following is a brief discussion of recently released accounting pronouncements that are pertinent to the Companys business:

In December 2010, the Emerging Issues Task Force of the FASB reached consensus regarding the
disclosure of pro forma information for business combinations. This new guidance addressed the
diversity in practice concerning the interpretation of the pro forma revenue and earnings
disclosure requirements for business combinations. The guidance specifies that if a public entity
presents comparative financial statements, the entity should disclose revenue and earnings of the
combined entity as though the business combination had occurred as of the beginning of the
comparable prior annual reporting period only. The amendments also expand the supplemental pro
forma disclosures to include a description of the nature and amount of material, nonrecurring pro
forma adjustments directly attributable to the business combination included in the reported pro
forma revenue and earnings. The amendments affect any public entity that enters into business
combinations that are material on an individual or aggregate basis. The new guidance is applicable
to business combinations for which the acquisition date is on or after the first annual reporting
period beginning on or after December 15, 2010. The Company is adopting this new guidance in the
first quarter of 2011 and will apply this guidance to our recent acquisition of ADAM, completed in
February 2011.

In January 2010, the FASB issued new guidance regarding disclosures about fair value
measurements. The guidance requires additional disclosures and clarifies some existing disclosure
requirements about fair value measurement as set forth in earlier related guidance. Specifically
this new guidance now requires a reporting entity to disclose separately the amounts of significant
transfers in and out of Level 1 and Level 2 fair value measurements and describe the reasons for
the transfers; and for fair value measurements using significant unobservable inputs, a reporting
entity should present separately information about purchases, sales, issuances, and settlements.
Also a reporting entity should provide disclosures about the valuation techniques and inputs used
to measure fair value for both recurring and nonrecurring fair value measurements. This new
guidance is effective for interim and annual reporting periods beginning after December 15, 2009,
except for the disclosures about purchases, sales, issuances, and settlements in the roll forward
of activity in Level 3 fair value measurements. Those disclosures are effective for fiscal years
beginning after December 15, 2010, and for interim periods within those fiscal years. Early
application is permitted. The Company adopted and applied this pronouncement during its current
year ending December 31, 2010.

In September 2009, FASB issued amended revenue recognition guidance related to revenue
arrangements with multiple deliverables. This new pronouncement: (a) provides application guidance
on whether multiple deliverables exist in an arrangement with a customer, and if so, how the
arrangement consideration should be separated and allocated; (b) requires an entity to allocate
revenue using estimated selling prices of deliverables if vendor-specific objective evidence
(VSOE) or third party evidence (TPE) of selling prices is not available; and, (c) eliminates
the use of the residual method to allocate revenue. This guidance is to be applied on a
prospective basis for revenue arrangements entered into in fiscal years beginning on or after June
15, 2010, with earlier application permitted. Alternatively, an entity can elect to adopt new
guidance on a retrospective basis. The Company is adopting this new guidance in the first quarter
of 2011.

Also in September 2009, the FASB issued new guidance related to certain revenue arrangements
that include software elements which removes tangible products from the scope of previously issued
authoritative guidance on software revenue recognition and provides guidance on determining whether
software deliverables in an arrangement that include tangible products are within the scope of
existing software revenue guidance. This guidance is to be applied on a prospective basis for
revenue arrangements entered into in fiscal years beginning on or after June 15, 2010, with earlier
application permitted. Alternatively, an entity can elect to adopt new guidance on a retrospective
basis. The Company will adopt this new guidance in 2011 but does not expect its adoption to have a
material impact on our consolidated financial position, results of operations or cash flows, as the
sale of tangible products are not a significant component of the Companys revenues.

In December 2007, the FASB issued new accounting guidance pertaining to the accounting for
business combinations and related disclosures. This new guidance addresses the recognition and
accounting for identifiable assets acquired, liabilities assumed, and non-controlling interests in
business combinations. The guidance also establishes expanded disclosure requirements for business
and improves the relevance, representational faithfulness, and comparability of the information
that a reporting entity provides in its financial reports about a business combination and its
effects. The guidance was effective for fiscal years beginning after December 15, 2008, and we
applied this new pronouncement to each of our business acquisitions consummated during both the
years ending December 31, 2010 and 2009.

The basic and diluted earnings per share (EPS), and the basic and diluted weighted average
shares outstanding for all periods presented in the accompanying Consolidated Statements of Income
have been adjusted to reflect the retroactive effect of the Companys three-for-one stock split
dated October 9, 2008 and the three-for-one stock split dated January 4, 2010. The earnings per
share information on a comparative basis both prior to and after the subsequent event pertaining to
the January 4, 2010 three-for-one stock split is presented in the table below.

To calculate diluted earnings per share, interest expense related to convertible debt
excluding imputed interest, was added back to net income as follows:

For the year ended

December 31,

(in thousands)

2010

2009

2008

Net income

$

59,019

$

38,822

$

27,314

Convertible debt interest (excludes imputed interest)

10

466

634

Net income for diluted earnings per share purposes

$

59,029

$

39,288

$

27,948

Diluted shares outstanding *

39,018

38,014

36,780

Diluted earnings per common share *

$

1.51

$

1.03

$

0.76

*

Adjusted to reflect the effect of the 3-for-1 stock split dated January 4, 2010

Basic EPS is equal to net income divided by the weighted average number of shares of
common stock outstanding for the period. Diluted EPS takes into consideration common stock
equivalents which for the Company consist of stock options, restricted stock, and convertible debt.
With respect to stock options, diluted EPS is calculated as if the Company had additional common
stock outstanding from the beginning of the year or the date of grant or issuance, net of assumed
repurchased shares using the treasury stock method. With respect to convertible debt, diluted EPS
is calculated as if the debt instrument had been converted at the beginning of the reporting period
or the date of issuance, whichever is later. Diluted EPS is equal to net income plus interest
expense on convertible debt, divided by the combined sum of the weighted average number of shares
outstanding and common stock equivalents. At December 31, 2010
there were approximately 3,340,476
shares potentially issuable with respect to stock options which could dilute EPS in the future but
which were excluded from the diluted EPS calculation because presently their effect is
anti-dilutive. Diluted shares outstanding determined as follows for each years ending December 31,
2010, 2009, and 2008.

For the year ended

December 31,

2010

2009

2008

Basic wtd. avg. shares outstanding

34,845,126

31,398,263

29,514,183

Incremental shares

4,173,187

6,616,094

7,266,174

Diluted shares outstanding

39,018,313

38,014,357

36,780,357

On October 10, 2009 the Companys Board of Directors approved a 3-for-1 stock split on shares
of its common stock (the 2010 Stock Split) in the
form of a stock dividend. The 2010 Stock Split was effective as of January 4,
2010 for all shares outstanding as of the close of business on December 21, 2009 (the record date).
As a result of the 2010 Stock Split, every share of the Companys common stock was converted into
three shares of the Companys common stock. Each stockholders percentage ownership in the Company
and proportional voting power remains unchanged after the 2010 Stock Split. Furthermore, as a
result of the 2010 Stock Split approximately 23.0 million additional shares of common stock were
issued and the Companys issued and outstanding common stock increased to approximately 34.5 and
34.4 million shares, respectively. The issuance of the additional shares has been accounted for as
a stock dividend by the transfer of approximately $2.3 million from additional paid-in capital to
common stock. Shares reserved for issuance under the Companys 1996 Incentive Compensation Program,
as amended and restated in 2006, and for the Companys outstanding convertible promissory notes
issued in August 2009 were similarly adjusted.

On
July 29, 2008 the Board of Directors approved and declared a
3-for-1 stock split in the form of a stock dividend on shares
of Ebixs common stock (the Stock Split) effective October 9, 2008 (the Split Date) outstanding
as of the close of business on September 29, 2008. As a result of the Stock Split, every share of
the Companys common stock was converted into three shares common stock. Each stockholders
percentage ownership in the Company and proportional voting power remained unchanged after the
Stock Split. Furthermore, as a result of the Stock Split approximately 6.5 million additional
shares of common stock were issued and the Companys issued and outstanding common stock was
increased to approximately 9.8 million shares. The issuance of the additional shares was accounted
for as a stock dividend by the transfer of approximately $635 thousand from additional paid-in
capital to common stock. Shares reserved for issuance under the Companys 1996 Incentive
Compensation Program, as amended and restated in 2006, and for the Companys 2.5% convertible
promissory notes were similarly adjusted. Information presented in these Consolidated Financial
Statements and accompanying notes have been retroactively adjusted for all periods presented to
reflect the retroactive effect of the stock split.

The Companys business acquisitions are accounted for under the purchase method of accounting
in accordance with the FASBs accounting guidance on the accounting for business combinations.
Accordingly, the consideration paid by the Company for the businesses it purchases is allocated to
the assets and liabilities acquired based upon their estimated fair values as of the date of the
acquisition. The excess of the purchase price over the estimated fair values of assets acquired and
liabilities assumed is recorded as goodwill. Recognized goodwill pertains to the value of the
expected synergies to be derived from combining the operations of the businesses we acquire
including the value of the acquired workforce.

2010 Acquisitions

During the year ended December 31, 2010, Ebix completed several relatively small business
acquisitions which are detailed further in the following paragraphs.

During the Companys third quarter ending September 30, 2010, Ebix: (a) acquired all of the
stock of Brazilian-based USIX Technology, S.A. (USIX), a provider of broker systems and related
services for insurance carriers across Latin America; and, (b) acquired all of the stock of
Singapore based E-Trek Solutions PTE Ltd, (E-Trek) a provider of underwriting and claims
processing services for the insurance industry in Singapore.

During the Companys second quarter ending June 30, 2010, Ebix: (a) acquired all of the assets
of Houston, Texas based Connective Technologies, Inc. (Connective Technologies) a premier
provider of on-demand software solutions for property and casualty insurance carriers in the United
States; and, (b) acquired all of the stock of Australian based Trades Monitor a provider of
insurance related software services for the Australian insurance industry.

During the Companys first quarter ending March 31, 2010, Ebix acquired all of the stock of
Brazilian based MCN Technology & Consulting (MCN) a provider of software development and
consulting services for insurance companies, insurance brokers, and financial institutions in
Brazil.

The aggregate
net cash consideration paid by Ebix for all of these acquisitions was $15.2
million and the former shareholders or owners of the acquired companies retain the right to earn up
to an additional $12.9 million if certain incremental revenue targets are achieved over the
two-year anniversary date subsequent to their respective effective dates of the acquisition. The
Company has accrued $8.7 million upon analysis of the fair value of the contingent liabilities and
the expected performance of the operating units. The results of operations for each of the business
combinations described in the preceding paragraphs have been included in the Companys consolidated financial statements as of and since each of their respective effective dates of the
acquisition.

2009 Acquisitions

E-Z Data, Inc.  Effective October 1, 2009, the Company acquired E-Z Data, Inc. E-Z Data,
with principal offices in Pasadena, CA, is a provider of on-demand customer relationship management
(CRM) solutions for insurance companies, brokers, agents, investment dealers, and financial
advisors. The Company acquired the business operations and intellectual property of E-Z Data for an
aggregate purchase price of $50.53 million paid to E-Z Datas shareholders consisting of cash
consideration in the amount of $25.53 million paid at closing and $25.00 million in shares of our
common stock valued at the average market closing price for the three most recent days prior to
September 30, 2009. Furthermore, under the terms of the agreement the E-Z Data sellers hold a put
option exercisable during the thirty-day period immediately following the two-year anniversary date
of the business acquisition, which if exercised would enable them to sell the underlying shares of
common stock back to the Company at a 10% discount off of the per-share value established on the
effective date of the closing of Ebixs acquisition of E-Z Data. This put option is described in
more detail in Note 11. The Company funded the cash portion of the purchase price for this business
acquisition using the proceeds from the Companys two convertible promissory notes issued in late
August 2009. The Company has added the E-Z Datas product line to its EbixExchange division thereby
providing access to the majority of the life and annuity desktop applications across the United
States. In summary in regards to the E-Z Data acquisition the Company recorded goodwill in the
amount of $43.8 million, an indefinite-life intangible asset of $14.2 million with respect to
existing contractual relationships
with corporate clients, definite lived intangible assets with respect to acquired retail
customer relationships in the amount of $3.8 million and to non-compete agreements in the amount of
$418 thousand, and acquired developed technology in the amount of $2.3 million.

Peak Performance Solutions, Inc.  Effective October 1, 2009, Ebix acquired Peak effective
October 1, 2009. Pursuant to the terms of the stock purchase agreement, the Company paid Peaks
shareholders $8.0 million in cash for all of Peaks outstanding stock. Peak, with operations based
out of Columbus, OH, provides comprehensive, end-to-end insurance software and technology solutions
to insurance companies and self-insured entities for workers compensation claims processing, risk
management administration, and managed care tracking. At the acquisition date management estimated that
the full $1.5 million earn out would be achieved and paid out, and therefore the amount was accrued
and included in the original purchase price allocation. The Company funded this acquisition with
internal resources using available cash reserves. In summary in regards to the Peak acquisition the
Company recorded goodwill in the amount of $7.5 million, and definite lived assets with respect to
acquired customer relationships in the amount of $2.1 million and acquired developed technology in
the amount of $509 thousand. During 2010 the Company recognized a $1.5 million reduction to
reported general and administrative expenses associated with the reversal of the previously
recorded contingent liability earnout obligation because during the subsequent 2010 earnout period
the defined revenue targets were not achieved by the Peak operations.

Facts Services, Inc.  Effective May 1, 2009, Ebix, Inc. acquired Facts, a Miami, Florida
based provider of fully automated software solutions for healthcare payers specializing in claims
processing, employee benefits, and managed care. Facts products are available in either an ASP or
self-hosted model. The Company paid the Facts shareholders $7.0 million for all of Facts stock.
The Company has combined Facts operations with its Pittsburgh health services division operating
under the name of EbixHealth, which includes operating results of Facts starting in the second
quarter of 2009. Ebix financed this acquisition with internal resources using available cash
reserves. The Company has recognized $4.7 million of goodwill and $2.2 million of intangible assets
in connection with the acquisition of Facts. The recognized goodwill pertains to the value of the
expected synergies to be derived from combining the operations of Facts with Ebix, and the value of
the acquired workforce.

2008 Acquisitions

ConfirmNet
CorporationEffective November 1, 2008 Ebix acquired ConfirmNet a provider of
insurance certificate creation and tracking services. The Company paid ConfirmNet shareholders
$7.36 million for all of ConfirmNets stock, and the ConfirmNet shareholders earned
an additional
$3.1 million for meeting certain revenue objectives during 2008 which was paid in the
first quarter
of 2009, and earned an additional $3.0 million for meeting certain revenue objectives
during 2009
which was paid in the second quarter of 2010. Also during the year ended
December 31, 2009, as a
result of completing the valuation of acquired assets, the Company reduced goodwill by $617
thousand.

Acclamation
Systems, Inc.Effective August 1, 2008 Ebix acquired Acclamation a
developer of
supplier software and e-commerce solutions to the health insurance industry, effective
August 1,
2008. The Company acquired all of the stock of Acclamation for a payment of $22 million
in cash and
additional future payments of up to $3 million over a two year period subsequent to the
effective
date of the acquisition if certain customer revenue targets for the
business of the Acclamation division are achieved. No accrual was made for any potential earnout as of
December 31, 2010 or 2009 because during the subsequent two
annual earnout periods the defined revenue targets were not achieved
by the Acclamation operations. The Company also
incurred approximately $85 thousand of costs primarily consisting of legal, accounting, due
diligence, and filing fees directly related to the closing of the acquisition. Ebix financed this
acquisition with a combination of the proceeds from the issuance of convertible debt and available
cash reserves. During the year ending December 31, 2009, as a result of the final
working capital
settlement, the Company recorded a $347 thousand increase to goodwill.

Periculum Services GroupEffective April 28, 2008 Ebix acquired Periculum a provider of
certificate of insurance tracking services. The Company acquired all of the stock of Periculum for
a payment of $1.1 million and Periculums shareholders earned, and were paid, an additional $200
thousand for meeting certain revenue objectives which was recorded as an increase to goodwill
during the year ended December 31, 2009.

Telstra eBusiness ServicesEffective January 2, 2008 Ebix acquired Telstra eBusiness Services
(Telstra) an insurance exchange located in Melbourne, Australia. The Company purchased all of the
stock of Telstra for a payment of $50 million Australian dollars (US $43.9 million). Telstra was a
wholly owned subsidiary of Telstra Services Solutions Holding Limited. The Company also incurred
approximately $368 thousand of expenses primarily consisting of legal, accounting, due diligence,
and filing fees directly related to the closing of the acquisition. Ebix financed this acquisition
with a combination of $1.6 million of available cash reserves, $16.5 million from the Companys
line of credit, $20.0 million of convertible debt, and $5.7 million from sales of the Companys
common stock. The operating results of Telstra have been included in the Companys reported net
income since the first quarter of 2008. The acquisition also gave rise to the elimination of
certain personnel of Telstra and as a the Company recognized a liability of $198 thousand related
to this elimination of personnel that was undertaken as part of the final integration plan that was
implemented immediately after the closing of the acquisition. The Company recognized an
indefinite-life intangible and associated estimated fair value with respect to the
contractual/territorial relationships existing with the property and casualty insurance carriers in
Australia. These contractual/territorial rights are perpetual in nature and, therefore, the useful
lives are considered indefinite. Indefinite-lived intangible assets are not amortized, but rather
are tested for impairment annually. In summary the Company recorded an indefinite-life intangible
asset with respect to the insurance carriers in the amount of $14.7 million, definite lived assets
with respect to acquired customer relationships in the amount of $2.6 million (with an estimated
useful life of 20 years), and acquired developed technology in the amount of $523 thousand (with an
estimated useful life of 3 years). During the year ended December 31, 2009, as a result of
completing the valuation of acquired intangible and tangible assets, the Company recorded a $1.0
million increase to goodwill.

The following table summarizes the net assets acquired as a result of the acquisitions that
occurred during 2010 and 2009:

December 31,

(In thousands)

2010

2009

Current assets

$

1,511

$

1,919

Property and equipment

411

2,065

Intangible assets

5,028

11,276

Indefinite-lived intangibles



14,240

Goodwill

19,194

55,970

Total assets acquired

26,144

85,470

Less: liabilities assumed

(10,427

)

(19,811

)

Net assets acquired

$

15,717

$

74,776

The following table summarizes the separately identified intangible assets acquired as a
result of the acquisitions that occurred during 2010 and 2009:

December 31,

2010

2009

Weighted

Weighted

Average

Average

Intangible asset Category

Fair Value

Useful Life

Fair Value

Useful Life

(in thousands)

(in years)

(in thousands)

(in years)

Customer relationships

$

3,778

13.2

$

7,755

12.6

Developed technology

1,058

7.6

3,103

5.0

Non-compete agreements





418

5.0

Non-compete agreements

192

10.0





Total acquired intangible assets

$

5,028

11.9

$

11,276

10.2

Estimated aggregated future amortization expense for the intangible assets recorded as part of
the MCN, Trades Monitor, e-Trek, Connective Technologies, USIX, Facts, Peak, E-Z Data, Confirmnet,
Acclamation, Periculum, Telstra, and other prior acquisitions is as follows:

This unaudited pro forma financial information is provided for informational purposes only and
does not project the Companys results of operations for any future period:

As Reported

Pro Forma

As Reported

Pro Forma

2010

2010

2009

2009

(unaudited)

(unaudited)

(In thousands)

Revenue

$

132,188

$

139,047

$

97,685

$

125,612

Net Income

$

59,019

$

59,635

$

38,822

$

38,032

Basic EPS*

$

1.69

$

1.71

$

1.24

$

1.69

Diluted EPS*

$

1.51

$

1.52

$

1.03

$

1.01

*

Adjusted to reflect the effect of the 3-for-1 stock split dated January 4, 2010; see Note 2.

The preceding unaudited pro forma financial information for the year 2010 includes twelve
months of pro forma financial results from the acquisitions of MCN, Trades Monitor, Connective
Technologies, E-Trek, and USIX as if these acquisitions had been made on January 1, 2010, whereas
the Companys reported financial statements for the year 2010 include only the following actual
financial results: eleven months for MCN; nine months for Trades Monitor; seven months for
Connective Technologies; six months for E-Trek and, four months for USIX.

Similarly, the unaudited pro forma financial information for the year 2009 includes twelve
months of pro forma financial results from the acquisitions of MCN, Trades Monitor, Connective
Technologies, E-Trek, USIX, Facts, E-Z Data and Peak as if these acquisitions had been made on
January 1, 2009, whereas the Companys reported financial statements for the year 2009 include no
financial information for the 2009 operating results of MCN, Trades Monitor, Connective
Technologies, E-Trek, and USIX, and includes only eight months for Facts, and three months for
Peak, and E-Z Data.

In the above table the unaudited pro forma 2010 revenue increased by
$13.4 million from the unaudited pro forma 2009 revenue of
$125.6 million to $139.0 million, representing an 11% increase.

Note 5: Commercial Bank Financing Facility

On February 12, 2010 the Company entered a credit agreement with Bank of America N.A. (BOA)
providing for a $35 million secured credit facility which is comprised of a two-year, $25 million
secured revolving credit facility, and a $10 million secured term loan which amortizes over a two
year period with quarterly principal and interest payments that commenced on March 31, 2010 and a
final payment of all remaining outstanding principal and accrued interest due on February 12, 2012.
The credit facility has a variable interest rate currently set at LIBOR plus 1.50%. The revolving
credit facility is used by the Company to partially satisfy working capital requirements primarily
in support of current operations, organic growth, and accretive business acquisitions. The
underlying financing agreement contains financial covenants regarding the Companys annualized
EBITDA, fixed
charge coverage ratio, as well as certain restrictive covenants including the incurrence of
new debt and consummation of new business acquisitions. The Company is in full compliance with all
such financial and restrictive covenants and there have been no events of default.

At December 31, 2010 the outstanding balance on the revolving line of credit was $25.0 million
and the facility carried an interest rate of 1.77%. This balance is included in the long-term
liabilities section of the Consolidated Balance Sheets. During the twelve month period
ending December 31, 2010 the average and maximum outstanding balance on the revolving line of
credit was $18.7 million and $25.0 million respectively, and the weighted average interest rate was 1.78%. The balance of the revolving line of
credit is included in the long-term section liabilities section of the Consolidated
Balance Sheets.

At December 31, 2010 the outstanding balance on the term loan was $5.0 million and it also
carried an interest rate of 1.77%. During the twelve months ended December 31, 2010 payments in
the aggregate amount of $5.0 million were made against the term loan, and the weighted average interest rate was 1.78%. The balance of the term loan
is included in the current liabilities section of the Consolidated Balance Sheets.

Note 6: Convertible Debt

The counterparties to our convertible debt arrangements are and were significant shareholders
of the Companys common stock.

During August 2009 the Company issued three convertible promissory notes raising a total of
$25.0 million. Specifically on August 26, 2009 the Company entered into a Convertible Note Purchase
Agreement with Whitebox VSC, Ltd (Whitebox) in an original amount of $19.0 million, which amount
is convertible into shares of common stock at a conversion price of $16.00 per share, subject to
certain adjustments as set forth in the note. The note has a 0.0% stated interest rate. No warrants
were issued with this convertible note. The note is payable in full at its maturity date of August
26, 2011. Also on August 26, 2009 the Company entered into a Convertible Note Purchase Agreement
with IAM Mini-Fund 14 Limited, a fund managed by Whitebox, in an original amount of $1.0 million,
which amount is shares of common stock at a conversion price of $16.00 per share, subject to
certain adjustments as set forth in the note. The note has a 0.0% stated interest rate. No warrants
were issued with this convertible note. The note is payable in full at its maturity date of August
26, 2011. Finally, on August 25, 2009 the Company entered into a Convertible Note Purchase
Agreement with the Rennes Foundation in an original amount of $5.0 million, which amount is
potentially convertible into 300,000 shares of common stock at a conversion price of $16.67 per
share, subject to certain adjustments as set forth in the note. The note has a 0.0% stated interest
rate. No warrants were issued with this convertible note. The note is payable in full at its
maturity date of August 25, 2011. With respect to each of these convertible notes, and in
accordance with the terms of the notes, as understood between the Company and each of the holders,
upon a conversion election by the holder the Company must satisfy the related original principal
balance in cash and may satisfy the conversion spread (that being the excess of the conversion
value over the related original principal component) in either cash or stock at option of the
Company. During 2010 Whitebox VSC, Ltd and IAM Mini-Fund 14 Limited elected to fully convert all
of their August 26, 2009 Convertible Promissory Notes. The Company settled these conversion
elections by paying $20 million in cash with respect to the principal component, paying $2.5
million in cash for a portion of the conversion spread, and issuing 283,378 shares of Ebix common
stock for the remainder of the conversion spread. The Company also recognized a pre-tax gain in
the amount of $24 thousand with respect the settlement of this convertible debt.

In regards to the convertible promissory notes issued in August 2009 and discussed in the
preceding paragraph the Company follows the FASB accounting guidance related to the accounting for
convertible debt instruments that may be partially or wholly settled in cash upon conversion. This
guidance requires us to account separately for the liability and equity components of these types
of convertible debt instruments in a manner that reflects the Companys nonconvertible debt
borrowing rate when interest cost is recognized in subsequent periods. This guidance requires
bifurcation of the debt and equity components, re-classification of the then derived equity
component, and then accretion of the resulting discount on the debt as part of interest expense
recognized in the income statement. The application of this accounting guidance with respect to
these convertible debt instruments resulted in the Company recording $24.2 million as the carrying
amount of the debt component, and $852 thousand as debt discount and the carrying amount for the
equity component. The bifurcation of these convertible debt instruments was based on the calculated
fair value of

similar debt instruments at August 2009 that do not have a conversion feature and associated equity component. The annual interest rate determined for
such similar debt instruments in August 2009 was 1.75%. The resulting discount is being amortized
to interest expense over the two year term of the convertible notes. At December 31, 2010, the
carrying value of the Convertible Notes was $4.9 million and the unamortized debt discount was $56
thousand. The liability component of these convertible notes is classified as a current liability
and is presented in the current portion of convertible debt in the Companys Consolidated Balance
Sheets because at December 31, 2010 our closing stock price was $23.67 per share, therefore, these
notes are considered to be current liabilities based on the relative conversion prices. We
recognized non-cash interest expense of $328 thousand during 2010 related to the amortization of
the discount on the liability component. At December 31, 2010 the if-converted value of the notes
exceeds their principal amounts by $2.1 million. For federal income tax purposes, the issuance of
the convertible notes is considered to be an issuance of debt with an original issue discount. The
amortization of this discount in future periods is not deductible for tax purposes. Therefore, upon
issuance of the debt, we recorded an adjustment of $318 thousand to increase our deferred tax
liabilities (included in other liabilities) and a corresponding reduction of the related equity
component which is in included in additional paid-in capital. Because the principal amount of the
convertible notes must be settled in cash upon conversion, the convertible notes will only impact
diluted earnings per share when the average price of our common stock exceeds the conversion price,
and then only to the extent of the incremental shares associated with the conversion spread. We
include the effect of the additional shares that may be issued from conversion in our diluted net
income per share calculation using the treasury stock method.

The Company previously had a $15.0 million convertible note with Whitebox, originally
dated July 11, 2008. On February 3, 2010, Whitebox fully converted the remaining principal on the
$15 million note in the amount of $4.39 million and accrued interest in the amount of $62 thousand
into 476,662 shares of the Companys common stock.

Furthermore, the Company also previously had $20.0 million convertible note with Whitebox
originally dated December 18, 2007. On October 7, 2009 the Company exercised its rights as
provided in the Agreement and elected to exercise its mandatory conversion option. Accordingly the
Company caused Whitebox to surrender the underlying 2.5% Secured Convertible Promissory Note due
December 18, 2009, and to convert the remaining principal on said Note in the amount of $5.3
million together with accrued interest thereon in the amount of $105 thousand into 762,810 shares
of the Companys common stock at the conversion price of $7.09 per share.

As of December 31, 2010 the total remaining amount of convertible debt was $5.0 million which
solely consists of a $5.0 million convertible note with Rennes Foundation.

Note 7: Commitments and Contingencies

Lease CommitmentsThe Company leases office space under non-cancelable operating leases with
expiration dates ranging through 2015, with various renewal options. Capital leases range from
three to five years and are primarily for computer equipment. There were multiple assets under
various individual capital leases at December 31, 2010 and 2009.

Commitments for minimum rentals under non-cancellable leases and debt obligations as of
December 31, 2010 were as follows:

Sublease income for 2010, 2009 and 2008 was $145 thousand, $141 thousand, and $175 thousand,
respectively.

ContingenciesThe Company is involved in various claims and legal actions arising in the
ordinary course of business. In the opinion of management, the ultimate disposition of these
matters will not have a material adverse effect on the Companys consolidated financial position,
results of operations or liquidity.

Self InsuranceFor most of the Companys U.S. employees, the Company is currently
self-insured for its health insurance and has a stop loss policy that limits the individual
liability to $100 thousand per person and the aggregate liability to 125% of the expected claims
based upon the number of participants and historical claims. As of December 31, 2010 and 2009, the
amount accrued on the Companys consolidated balance sheet was $269 thousand and $132 thousand,
respectively. The maximum potential estimated cumulative liability for the annual contract period,
which ends in September 2011, is $2.5 million.

Note 8: Share-based Compensation

Stock OptionsThe Company accounts for compensation expense associated with stock options
issued to employees, Directors, and non-employees based on their fair value, which is calculated
using an option pricing model, and is recognized over the service period, which is usually the
vesting period. At December 31, 2010, the Company has one equity based compensation plan.
No stock
options were granted to employees during 2010, 2009, or 2008; however, options were granted to
Directors in 2010, 2009 and 2008. Stock compensation expense of $444 thousand, $216 thousand, and
$107 thousand was recognized during the year ending December 31, 2010, 2009, and 2008 respectively
on outstanding and unvested options.

The fair value of options granted during the twelve months ended 2010, 2009 and 2008 is
estimated on the date of grant using the Black-Scholes option pricing model. The following table
includes the weighted- average assumptions used in estimating the fair values and the resulting
weighted-average fair value of stock options granted in the periods presented:

A summary of stock option activity for the years ended December 31, 2010, 2009 and 2008 is as
follows:

Weighted

Average

Weighted

Remaining

Average

Contractual

Aggregate Intrinsic

Within Plans

Outside Plan

Exercise Price

Term (Years)

Value

(in thousands)

Outstanding at December 31, 2007

4,748,832

22,500

$

1.32

4.46

$

32,480

Granted

270,000



$

7.13

Exercised

(300,024

)

(8,433

)

$

4.01

Canceled



(8,442

)

$

5.74

Outstanding at December 31, 2008

4,718,808

5,625

$

1.47

3.71

$

30,680

Granted

135,000



$

17.58

Exercised

(302,163

)



$

5.18

Canceled

(9,009

)



$

8.39

Outstanding at December 31, 2009

4,542,636

5,625

$

1.69

2.91

$

66,344

Granted

45,000



$

21.70

Exercised

(1,247,160

)

(5,625

)

$

4.99

Canceled





$



Outstanding at December 31, 2010

3,340,476



$

2.22

2.51

$

71,638

Exercisable at December 31, 2010

3,092,786



$

1.28

2.51

$

69,259

The aggregate intrinsic value for stock options outstanding and exercisable is defined as
the difference between the market value of the Companys stock as of the end of the period and the
exercise price of the stock options. The total intrinsic value of stock options exercised during
2010, 2009 and 2008 was $5.7 million, $2.0 million and $1.9 million, respectively.

Cash received from
option exercises under all share-based payment arrangements for the years
ended December 31, 2010, 2009, and 2008, was $1.2 million, $1.5 million, and $1.2 million,
respectively.

Restricted StockPursuant to the Companys restricted stock agreements, the restricted stock
vests in three equal annual installments. The restricted stock also vests with respect to any
unvested shares upon the applicable employees death, disability or retirement, the Companys
termination of the employee other than for cause or a change in control of the Company. A summary
of the status of the Companys non-vested restricted stock grant shares is presented in the
following table:

Grant Date

Shares

Fair Value

(in thousands)

Non vested at December 31, 2007

206,589

Granted

200,556

$

1,614

Vested

(108,003

)

Forfeited



Non vested at December 31, 2008

299,142

Granted

236,616

$

1,934

Vested

(130,446

)

Forfeited



Non vested at December 31, 2009

405,312

Granted

50,371

$

809

Vested

(241,215

)

Forfeited

(4,183

)

Non vested at December 31, 2010

210,285

As of December 31, 2010 there was $1.6 million of total unrecognized compensation cost related
to non-vested share based compensation arrangements granted under the 2006 Incentive Compensation
Program. That cost is expected to be recognized over a weighted-average period of 2.74 years. The
total fair value of shares vested during the years ended December 31, 2010, 2009, and 2008 was $1.8
million, $742 thousand, and $259 thousand, respectively.

In the aggregate the total compensation expense recognized in connection with the restricted
grants was $1.4 million, $1.2 million, and $594 thousand, during each of the years ending December
31, 2010, 2009 and 2008, respectively.

As of December 31, 2010 the Company has 1,050,792 shares of common stock reserved for stock option
and restricted stock grants.

The income tax provision at the Federal statutory rate differs from the effective rate because
of the following items:

Year Ended

Year Ended

Year Ended

December 31,

December 31,

December 31,

2010

2009

2008

Statutory rate

35.0

%

34.0

%

34.0

%

Change in valuation allowance

(4.1

)%

(18.2

)%

(9.8

)%

Tax impact of foreign subsidiaries

(25.6

)%

(19.5

)%

(20.3

)%

State income taxes, net of federal benefit

0.6

%

1.2

%

1.4

%

Uncertain tax matters

0.0

%

5.1

%

1.2

%

Permanent differences

(5.5

)%

(0.7

)%

(0.8

)%

Other

0.7

%

0.6

%

(0.9

)%

Effective rate

1.1

%

2.5

%

4.8

%

Current deferred income tax assets and liabilities are included in other current assets and
liabilities, and long-term deferred tax assets and liabilities are presented separately on a net
basis in the liability section at December 31, 2010 and 2009 in the accompanying Consolidated
Balance Sheets. The individual balances in current and long-term deferred tax assets and
liabilities are as follows:

Deferred income taxes reflect the impact of temporary differences between amounts of assets
and liabilities for financial reporting purposes and such amounts as measured by the applicable
local jurisdiction tax laws. Temporary differences and carry forwards which comprise the deferred
tax assets and liabilities as of December 31, 2010 and 2009 were as follows:

December 31, 2010

December 31, 2009

Deferred

Deferred

Assets

Liabilities

Assets

Liabilities

(In thousands)

Depreciation and amortization

$

334

$



$

284

$



Share-based compensation

842



356



Accruals and prepaids

1,068

422

1,085

223

Bad debts

422



208



Discount on convertible debt



143



281

Acquired intangible assets

1,008

14,448

792

13,659

Net operating loss carryforwards

10,827



13,766



Tax credit carryforwards

4,097



3,434



18,598

15,013

19,925

14,163

Valuation allowance

(6,626

)



(10,431

)



Total deferred taxes

$

11,972

$

15,013

$

9,494

$

14,163

During 2010 the Company released the remaining valuation allowance that had been held against
a portion of our cumulative legacy net operating loss (NOL) carryforwards in the United States
that were previously not expected to be realized based the projections of future taxable income
expected to be generated by our health benefits division. This valuation allowance was released as
management now believes that the uncertainties that had existed as to the performance of our health
benefits exchange operating segment related to the potential adverse impacts associated with the
than pending health care legislation are no longer relevant. As a result of this valuation release
the Company recognized a net deferred tax benefit in the amount of $2.3 million. Additionally the
Company is maintaining a valuation allowance in the amount of $6.6 million to fully offset the
deferred tax assets associated with cumulative NOLs that were obtained as a result of previous
business acquisitions and for which realization of these assets is not assured due to uncertainties
principally associated with limitations on the usage of these acquired NOLs posed by Section 382
of the U.S. internal revenue code. The effect of the change in the valuation allowance on the
effective tax rate is shown net of utilized and expiring net operating loss carry forwards. Changes
in the valuation allowance could have a material impact on the Companys future effective tax rate.

At December 31, 2010, the Company had remaining available domestic net operating loss (NOL)
carry-forwards of $28.5 million (net of $7.5 million utilized to offset domestic taxable income for
2010), which are available to offset future federal and certain state income taxes. A portion of
these NOLs will expire in each year 2019 through 2027.

The Companys consolidated effective tax rate is reduced because of the blend of reduced tax
rates in foreign jurisdictions where a significant portion of our income resides. Furthermore, the
Companys world-wide product development operations and intellectual property ownership has been
centralized into our India and Singapore subsidiaries, respectively. Our operations in India
benefit from a tax holiday which will continue thru 2015; as such local India taxable income, other
than passive interest and rental income, is not taxed. After the tax holiday expires taxable income
generated by our India operations will be taxed at 50% of the normal 33.99% corporate tax rate for
a period of five years. This tax holiday had the effect of reducing tax expense by $11.5 million.

The Companys operations in India are subject to a 19.94% Minimum Alternative Tax (MAT). The
tax paid under the MAT provisions is carried forward for a period of seven years and set off
against future tax liabilities computed under the regular corporate income tax provisions using the
33.99% corporate income tax rate. During the year ended December 31, 2010, the Company accrued or
paid $449 thousand in MAT. The accompanying Consolidated Balance Sheets as of December 31, 2010
includes a long-term deferred tax asset in the amount of $3.1 million associated with cumulative
future MAT tax credit entitlement

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, and
various states and foreign jurisdictions. With the exception of NOL carryforwards, the Company is
no longer subject to U.S.
federal or state tax examinations by tax authorities for years before 2006 due to the
expiration of the statue of limitations.

The Company follows the provisions of FASB accounting guidance on accounting for uncertain
income tax positions. Accordingly liabilities are recognized for a tax position, where based solely
on its technical merits, it is believed to be more likely than not fully sustainable upon
examination. This liability is included in other long-term liabilities in the accompanying
Consolidated Balance Sheets. A reconciliation of the beginning and ending amount of unrecognized
tax benefits is as follows:

(in thousands)

Balance at January 1, 2010

$

2,954

Additions for tax positions related to current year

$



Additions for tax positions of prior years

$

26

Reductions for tax position of prior years

$



Balance at December 31, 2010

$

2,980

The Company recognizes interest accrued and penalties related to unrecognized tax benefits as
part of income tax expense. As of December 31, 2010 approximately $602 thousand of estimated
interest and penalties is included in other long-term liabilities in the accompanying Consolidated
Balance Sheets.

Note 10: Stock Repurchases

The Board of Directors of Ebix, Inc. previously authorized a share repurchase plan to acquire
up to $15 million of the Companys current outstanding shares of common stock. Under the terms of
the Boards authorization, the Company retains the right to repurchase up to $15 million in shares
but does not have to repurchase this entire amount. The repurchase plans terms have been
structured to comply with the SECs Rule 10b-18, and are subject to market conditions and
applicable legal requirements. The program does not obligate the Company to acquire any specific
number of shares and may be suspended or terminated at any time. All purchases will be on the open
market and are expected to be funded from existing cash. Treasury stock is recorded at its acquired
cost. Through December 31, 2010, the Company has repurchased 961,335 shares of its common stock
under this plan for total consideration of $12.6 million.

Note 11: Derivative Instruments

The Company uses derivative instruments that are not designated as hedges under the FASB
accounting guidance related to the accounting for derivative instruments and hedging activity, to
hedge the fluctuations in foreign exchange rates for recognized balance sheet items such as
intercompany receivables. As of December 31, 2010 the Company has in place 24 annual foreign
currency hedge contracts maturing between March and September 2011 with a notional value totaling
$23.3 million. The intended purpose of these hedging instruments is to offset the income statement
impact of recorded foreign exchange transaction gains and losses resulting from U.S. dollar
denominated invoices issued by our Indian subsidiary whose functional currency is the Indian rupee.
The change in the fair value of these derivatives was recorded in foreign exchange gains in the
consolidated statements of income and was $1.3 million, $498 thousand and $0 for years ended
December 31, 2010, 2009 and 2008, respectively. As of December 31, 2010 the aggregate fair value of
these derivative instruments, which are included in other current assets, in the Company
consolidated balance sheet was $1.3 million. The Company has classified the foreign currency
hedge, which is measured at fair value on a recurring basis, as a level 2 instrument (i.e. wherein
fair value is determined based on observable inputs other than quoted market prices) which we
believe is the most appropriate level within the fair value hierarchy based on the inputs used to
determine its the fair value at the measurement date.

Also in connection with the acquisition of E-Z Data effective October 1, 2009, Ebix issued a
put option to the sellers which is exercisable during the thirty-day period immediately following
the two-year anniversary date of the business acquisition, which if exercised would enable them to
sell the underlying shares of common stock back to the Company at a 10% discount off of the
per-share value established on the effective date of the closing of Ebixs acquisition of E-Z Data.
In accordance with the relevant authoritative accounting literature a portion of the total purchase
consideration was allocated to this put liability based on its initial fair value which was
determined to be $6.6 million using a Black-Scholes model. The inputs used in the valuation of the
out option include term, stock
price volatility, current stock price, exercise price, and the risk free rate of return. For
the year ended December 31, 2010 and 2009 the fair value of the put option was recalculated and was
determined to have dropped $6.1 million and $89 thousand, respectively, which amount is
appropriately shown as other non-operating income in the Consolidated Statement of Income for the
year then ended. The Company has classified the put option as a level 2 instrument.

Note 12: Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses at December 31, 2010 and December 31, 2009, consisted of
the following:

2010

2009

(In thousands)

Trade accounts payable

$

2,569

$

1,766

Accrued professional fees

108

109

Acquisition earnout payable

8,911

4,700

Income taxes payable

1,686

1,392

Sales taxes payable

2,005

766

Amounts due to sellers of acquired entities



2,181

Other accrued liabilities

65

146

Total

$

15,344

$

11,060

Note 13: Other Current Assets

Other current assets at December 31, 2010 and December 31, 2009 consisted of the following:

The Company maintains a 401(k) Cash Option Profit Sharing Plan, which allows participants to
contribute a percentage of their compensation to the Profit Sharing Plan and Trust up to the
Federal maximum. The Companys contributions to the Plan were $284 thousand, $226 thousand, and
$161 thousand for the years ending December 31, 2010, 2009 and 2008, respectively.

Note 16: Geographic Information

The Company operates with one reportable segment whose results are regularly reviewed by the
Companys chief operating decision maker as to performance and allocation of resources. The
following enterprise wide information is provided. The following information relates to geographic
locations (all amounts in thousands):

We consider Bank of America/Merrill Lynch (BAML) to be a related party because BAML provides
commercial financing to the Company and is also a customer to whom the Company sells products and
services. Revenues recognized from BAML were $803 thousand, $957 thousand, and $849 thousand for
each of the years ending December 31, 2010, 2009, and 2008, respectively. Accounts receivable due
from BAML was $69 thousand $232 thousand and $103 thousand at December 31, 2010, 2009 and 2008,
respectively.

Consistent with Ebixs corporate mission of giving back to the communities in which we operate
our business, and as previously authorized by the Companys Board of Directors, during the year
ended December 31, 2010 Ebix donated $39 thousand to the Robin Raina Foundation, a non-profit
501(c) charity in support of fifty very under privileged children living in the poverty stricken
areas of Delhi, India; this amount includes $16 thousand in matching contributions made by our
employees.

Note 18: Quarterly Financial Information
(unaudited)

The following is the unaudited quarterly financial information for 2010, 2009 and 2008:

On February 7, 2011 Ebix closed the merger of Atlanta, Georgia based A.D.A.M., Inc. (or
ADAM) with a wholly owned subsidiary of Ebix. Under the terms of the merger agreement,
ADAM shareholders received, at a fixed exchange ratio, 0.3122 shares of Ebix common stock
for every share of ADAM common stock. Ebix issued approximately 3,650,914 shares of Ebix
common stock pursuant to the merger. This issuance of shares increased the Companys
diluted common share count to approximately 42,068,000 shares. In addition Ebix paid
approximately $944 thousand in cash for unexercised ADAM stock options. ADAM is a leading
provider of health information and benefits technology solutions in the United States.

New Commercial Banking Credit Facility

On March 8, 2011 Ebix and Bank of America N.A. jointly executed a mutually binding commitment
letter to amend and expand the existing credit facility. The amended credit facility, which
has been expanded to $55 million, is comprised of a three-year $35 million secured revolving
credit facility, and a $20 million secured term loan which amortizes over a three year period
with quarterly principal and interest payments. The new $55 million credit facility replaces
the former $35 million facility that had been with the same lender. The initial interest rate
applicable to the credit facility is LIBOR plus 1.50%. The Company expects the closing date to
formally execute the associated credit facility agreement documents will be on or before April
15, 2011.

Item 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

Item 9A:

CONTROLS AND PROCEDURES

Disclosure Controls and Procedures: The Company maintains controls and procedures designed to
ensure that it is able to collect the information we are required to disclose in the reports we
file with the SEC, and to process, summarize and disclose this information within the time periods
specified in the rules of the SEC. As of the end of the period covered by this report and pursuant
to Rule 13a-15 of the Securities Exchange Act of 1934 (Exchange Act), the Companys management,
including the Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the
effectiveness and design of our disclosure controls and procedures to ensure that information
required to be disclosed by the Company in the reports that it files under the Securities Exchange
Act of 1934 is recorded, processed, summarized and reported within the time periods specified by
the SECs rules and forms. Based upon that evaluation, the Companys Chief Executive Officer and
Chief Financial Officer concluded as of December 31, 2010 that the Companys disclosure controls
and procedures were effective in recording, processing, summarizing and reporting information
required to be disclosed, within the time periods specified in the SECs rules and forms.

Managements Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over
financial reporting for the Company. As of December 31, 2010, being the date of our most recently
completed fiscal year end, in order to evaluate the effectiveness of the design and operation of
our disclosure controls and procedures and our internal control over financial reporting, as
required by Section 404 of the Sarbanes-Oxley Act, management has conducted an assessment,
including testing, using the criteria in Internal Control-Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Companys system of
internal control over financial reporting is designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting standards. Because of its inherent
limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.

Managements assessment of and conclusion on the effectiveness of internal control over
financial reporting did not include an assessment of the internal controls for the recently
acquired businesses of MCN Technology & Consulting LTDA
(MCN), Trades Monitor Australia, PTY (Trades
Monitor), Connective Technologies, Inc. (Connective
Technologies) E-Trek Solutions PTE Ltd (E-Trek),
and USIX Technology S.A. (USIX), for which their financial information is included in the accompanying Consolidated Financial Statements of
Ebix, Inc from the effective date of their acquisitions during 2010. In the aggregate these
combined units represented approximately 5.9% of the Companys
consolidated revenue for 2010. The
effectiveness of the controls for these business operations will be evaluated by management during
2011.

The term internal control over financial reporting is defined as a process designed by, or
under the supervision of, our principal executive and principal financial officers, or persons
performing similar functions, and effected by our board of directors, management and other
personnel, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted
accounting principles and includes those policies and procedures that:

(1)

Pertain to the maintenance of records that in reasonable detail accurately and fairly
reflect our transactions and dispositions of assets;

(2)

Provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures are being made only in accordance with
authorizations of our management and directors; and,

(3)

Provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of our assets that could have a material effect on our
financial statements.

Based upon this evaluation and assessment, our Chief Executive Officer and Chief Financial
Officer concluded that as of December 31, 2010 our disclosure controls and procedures and our
internal control over financial reporting are effective to ensure, among other things, that the
information required to be disclosed by us in the reports that we file or submit under the
Securities and Exchange Act of 1934 is recorded, processed, summarized, and reported accurately.

Cherry, Bekaert & Holland, L.L.P., the independent registered public accounting firm that
audited our Consolidated Financial Statements included in this Annual Report on Form 10-K, audited
the effectiveness of our internal control over financial reporting as of December 31, 2010. Cherry,
Bekaert &Holland, L.L.P has issued their report which is included in this Annual Report on Form
10-K.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The Board of Directors and Stockholders of Ebix, Inc.:

We have audited Ebix, Inc.s internal control over financial reporting as of December 31, 2010,
based on criteria established in Internal Control-Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (the COSO criteria). Ebix, Inc.s management is
responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting included in the
accompanying Managements Report on Internal Control over Financial Reporting. Our responsibility
is to express an opinion on the companys internal control over financial reporting based on our
audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether effective internal control over financial reporting was
maintained in all material respects. Our audit included obtaining an understanding of internal
control over financial reporting, assessing the risk that a material weakness exists, and testing
and evaluating the design and operating effectiveness of internal control based on the assessed
risk. Our audit also includes performing such other procedures as we considered necessary in the
circumstances. We believe that our audit provides a reasonable basis for our opinion.

A companys internal control over financial reporting is a process designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles. A
companys internal control over financial reporting includes those policies and procedures that (1)
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (2) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company
are being made only in accordance with authorizations of management and directors of the company;
and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the companys assets that could have a material effect on the
financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or
detect misstatements. Also, projections of any evaluation of effectiveness to future periods are
subject to the risk that controls may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.

As indicated in the accompanying Managements Report on Internal Control over Financial Reporting,
managements assessment of and conclusion on the effectiveness of internal control over financial
reporting did not include the internal controls of MCN Technology & Consulting LTDA (MCN), Trades
Monitor Aust. PTY (Trades Monitor), Connective Technologies, Inc. (Connective Technologies), E-Trek
Solutions PTE LTD (E-Trek), and USIX Technology S.A. (USIX), which are included in the 2010
consolidated financial statements of Ebix, Inc. and which in the aggregate constituted
approximately 5.9% of Ebix consolidated revenues for the year ended December 31, 2010. Our audit of
internal control over financial reporting of Ebix, Inc. also did not include an evaluation of the
internal control over financial reporting of MCN, Trades Monitor, Connective Technologies, E-Trek,
and USIX.

In our opinion, Ebix, Inc. maintained, in all material respects, effective internal control over
financial reporting as of December 31, 2010, based on criteria established in Internal Control 
Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO).

We have also audited, in accordance with the standards of the Public Company Accounting Oversight
Board (United States), the consolidated balance sheets of Ebix, Inc. as of December 31, 2010 and
2009, and the related consolidated statements of income, stockholders equity and comprehensive
income, and cash flows for each of the three years in the period ended December 31, 2010, and the
related consolidated financial statement schedule for the years ended December 31, 2010, 2009, and 2008 and our
report dated March 16, 2011 expressed an unqualified opinion thereon.

There have been no changes in the Companys internal controls over financial reporting during
the last fiscal year that have materially affected, or are reasonably likely to materially affect,
the Companys internal controls over financial reporting.

Item 9B.

OTHER INFORMATION

Not Applicable.

PART III

Item 10.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

ROBIN RAINA, 44, has been a director at Ebix since 2000 and Chairman of the Board at Ebix
since May 2002. Mr. Raina joined Ebix, Inc. in October 1997 as our Vice PresidentProfessional
Services and was promoted to Senior Vice PresidentSales and Marketing in February 1998. Mr. Raina
was promoted to Executive Vice President, Chief Operating Officer in December 1998. Mr. Raina was
appointed President effective August 2, 1999, Chief Executive Officer effective September 23, 1999
and Chairman in May 2002. Mr. Raina holds an industrial engineering degree from Thapar University
in Punjab, India.

Areas of Relevant Experience. Mr. Rainas strategic direction for the Company and
implementation of such direction has proven instrumental for the Companys turnaround and growth.

HANS U. BENZ, 64, has been a director at EBIX since 2005. From 2001 to 2005 Mr. Benz was
President of the holding of the BISON GROUP, a Swiss corporation that develops and implements
process oriented business solution software in Europe. Prior to this position and from 1995 to 2001
he was President of a Swiss banking software development company belonging to the UBS Group.
Previously Mr. Benz was with the private bank of Coutts & Co., Zürich as Senior Vice President and
was also head of their global IT organization as a part of their larger worldwide NatWest IT
organization.

Areas of Relevant Experience. Mr. Benzs former business experience extends from
wholesale and retail industry to the Swiss private insurance industry as founding partner in a
national data center. He has extensive experience in the software ERP and finance sectors,
international marketing, strategic planning, IT planning, executive compensation, and defining
strategic vision.

PAVAN BHALLA, 48, has been a director since June 2004. He is currently the Executive Vice
President, Chief Financial Officer and Treasurer of Harris Interactive Inc., a position he has held
since October 2010. Prior to that, Mr. Bhalla served as Vice President of Finance for Hewitt
Associates, and had been in this role since December 2008. Prior to this position he was Hewitt
Associates Corporate Controller and served in that position from July 2006 to November 2008.
Previously Mr. Bhalla served as Senior Vice President of Finance for MCI Inc. from August 2003
until joining Hewitt Associates, Inc. Before joining MCI in August 2003, Mr. Bhalla spent over
seven years with BellSouth Corporation serving in a variety of executive positions, including Chief
Financial Officer of BellSouth Long Distance Inc. from 1999 to 2002. Mr. Bhalla holds a masters
degree in business administration from the University of Chicagos Booth School of Business.

Areas of
Relevant Experience. Mr. Bhalla has extensive hands on relevant experience in
corporate finance and international business transactions.

NEIL D. ECKERT, 48, has been a director since 2005. Mr. Eckert was nominated by Brit to serve on
the Companys board of Directors under an agreement between the Company and Brit. Until August
2010, Neil was Chief Executive of Climate Exchange plc, an AIM listed company. From 1995 until
April 2005, Mr. Eckert was Chief Executive of Brit Insurance Holdings PLC which is a UK and
International insurance and reinsurance company. Mr. Eckert founded the company in 1995 as an
Investment Trust listed on the London Stock Exchange. Neil served Brit as a Non Executive Director
from April 2005 until May 2008. Mr. Eckert is also Non-Executive Chairman of Design Technology and
Innovation Limited, a patenting and intellectual property company. Mr. Eckert is also
Non-Executive Chairman of Aggregated Micro Power Ltd, a business that specializes in developing and
investing in small scale alternative energy projects and technologies. Further, Mr. Eckert is
Non-Executive Chairman of Trading Emissions Plc, an AIM listed company which is one of the worlds
leading funds investing in emission reduction permits. Mr. Eckert also serves as a director for
Ri3K, a United Kingdom technology hub for the reinsurance market and Evofem Inc., an unlisted
healthcare company in United States. During the past ten years Mr Eckert has served as a director
of the following companies: Titan (South West) Limited, TEP Asia Limited, Climate Corporate
Advisory Services Limited, Insurance Futures Exchange Services Limited, and Whetstone Properties
Limited.

Areas of Relevant Experience. Mr. Eckert has an extensive background with experience
of operating as the CEO of two different public companies and has executive experience in strategic
planning, hands-on understanding of insurance industry, sales and marketing, corporate finance,
executive compensation and international matters.

ROLF HERTER, 47, has been a director since 2005. Mr. Herter is the managing partner of
Streichenberg, Attorneys at Law in Zurich, Switzerland. Streichenberg is a mid-sized commercial law
firm, and Mr. Herter has been managing partner since 2004. Mr. Herters practice consists, among
others, of representation for information technology companies, both private and publicly held. He
has served on the board of directors of several companies
and is currently serving as a member of the board of directors of IC Companys Switzerland AG
and Roccam Rocca Asset Management AG. He also serves as a supervisor of investments for several
Swiss and German companies.

Areas of Relevant Experience. Mr. Herter has extensive experience in the legal sector
with expertise in managing multiple companies in terms of investments, capital structure,
organization restructuring and governance, and with an expertise in European affairs

HANS UELI KELLER, 59, has been a director since 2004. Mr. Keller has spent over 20 years with
Zurich-based Credit Suisse, a global financial services company, serving as Executive Board Member
from 1997 to 2000, head of retail banking from 1993 to 1996, and head of marketing from 1985 to
1992. He is presently also serving as Chairman of the Board of both Swisscontent Corp. AG and Engel
& Voelkers Commercial, Switzerland.

The following table lists our four board committees, the directors who served on them as of
the end of 2010 and the number of committee meetings held in 2010.

Corporate Governance and

Name

Audit

Compensation

Nominating

Mr. Bhalla

C

Mr. Benz





Mr. Eckert

C

Mr. Herter



Mr. Keller



C

Mr. Raina*

2010 Meetings

5

4

2

C

= Chair



= Member

*

= Executive Officer/Director

In addition the Companys full Board of Directors met in person two times during and over the phone
eight times during 2010.

We have two executive officers, Robin Raina and Robert F. Kerris. Information as to Mr. Raina
is provided above.

ROBERT F. KERRIS, 57, joined the Company as Chief Financial Officer and Corporate Secretary on
October 22, 2007. Prior to joining the Company, Mr. Kerris was Chief Financial Officer at Aelera
Corporation. He held this position from May 2006 to October 2007. Previously he was a Financial
Vice President at Equifax, Inc. from November 2003 to April 2006, Corporate Controller at
Interland, Inc. from September 2002 to October 2003 and held senior financial management positions
at AT&T, BellSouth, and Northern Telecom. Mr. Kerris is a licensed certified public accountant and
holds an accounting and economics degree from North Carolina State University.

The Audit Committee exercises oversight responsibility regarding the quality and integrity of
our auditing and financial reporting practices. In discharging this responsibility, the Audit
Committee, among other things, selects the independent registered public accounting firm,
pre-approves the audit and any non-audit services to be provided by the auditors and reviews the
results and scope of the annual audit performed by the auditors. The Audit Committee currently
consists of Messrs. Bhalla (Chairman), Keller and Benz. After reviewing the qualifications of the
current members of the committee, and any relationships they may have with the Company that might
affect their independence from the Company, our Board of Directors has determined that: (1) all
current members of the Audit Committee are independent as that concept is defined in Section 10A
of the Securities Exchange Act of 1934, (2) all current members of the Audit Committee are
independent as that concept is defined in the NASDAQ listing standards, (3) all current members
of the Audit Committee are financially literate, and (4) Mr. Bhalla qualifies as an audit
committee financial expert as defined under SEC rules promulgated under the Sarbanes-Oxley Act of
2002. The Audit Committee met five times during 2010. The Audit Committee exercises its authority
pursuant to a written charter that was adopted in October 2004.

CODE OF ETHICS

The Company has adopted a Code of Ethics that applies to the Chief Executive Officer, Chief
Financial Officer and any other senior financial officers. This Code of Ethics is posted on the
Companys website at www.ebix.com, where it may be found by navigating to Ebix Inc.s Code of
Ethics under Corporate Governance within the Investor section of the website. The Company intends
to satisfy the disclosure requirement under Form 8-K regarding an amendment to, or waiver from, a
provision of this Code of Ethics by posting such information on the Companys website, at the
address and location specified above.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires the Companys officers and
directors and persons who beneficially own more than ten percent of a registered class of our
equity securities to file with the Securities and Exchange Commission reports of securities
ownership on Form 3 and changes in such ownership on Forms 4 and 5. Officers, directors and more
than ten percent beneficial owners also are required by rules promulgated by the Securities and
Exchange Commission to furnish the Company with copies of all such Section 16(a) reports that they
file. Based solely upon a review of the copies of Forms 3, 4, and 5 furnished to the Company or
representations by certain executive officers and directors that no such reports were required for
them, the Company believes that, during 2010 all of the Companys directors, officers and more than
ten-percent beneficial owners filed all such reports on a timely basis except for Mr. Kerris who
received a restricted stock grant on March 21, 2010
and Messrs. Benz, Bhalla, Eckert, Herter and Keller who received grants of stock options on
November 22, 2010 and belatedly filed Form 4s for such grants on March 15, 2011.

Item 11:

EXECUTIVE COMPENSATION

EXECUTIVE COMPENSATION

Compensation Disclosure and Analysis

Objectives and Goals

The objectives of the committee has been to adopt a compensation approach that is basically
simple, internally equitable and externally competitive, and that attracts, motivates and retains
qualified people capable of contributing to the growth, success and profitability of the Company,
thereby contributing to long-term stockholder value.



Simplicity. The committee believes that a compensation package with three major
elements of compensation is the simplest approach consistent with the Companys goals. The
Company generally does not utilize special personal perquisites such as private jets, payment
of country club dues, Company-furnished motor vehicles, permanent lodging or defrayment of
the cost of personal entertainment.

Internal Equity. Internal equity has generally been evaluated based on an assessment
of the relative contributions of the members of the management team. In 2010, the committee
did not undertake any formal audit or similar analysis of compensation equity with respect to
either the CEO relative to the other members of the management team or with respect to the
management team relative to the Companys employees
generally. However, the committee believes that the relative difference between CEO
compensation and the compensation of the Companys other executives is consistent with such
differences found in the Companys insurance services peer group and the market for executive
level personnel for public companies of similar size.



External Competitiveness. The committee believes it is important to management
retention and morale that compensation be competitive with our competitors. As a part of that
exercise, the committee hired an outside compensation consultant to review the competitive
landscape and to establish transparent criterion for CEO compensation. Based on the
consultants report and the contributions provided by individual board members, based on
their business experiences, the compensation committee established a transparent plan for CEO
compensation. The plan was unanimously adopted by the board of directors.

Major Compensation Components

The principal components of compensation for our executive officers are base salary,
short-term incentives, generally in the form of cash bonus programs, and long-term incentives,
generally in the form of equity-based awards such as stock awards. We believe the Companys goals
are best met by utilizing an approach to compensation with these three distinct elements.



Base Salaries. The Companys base salaries are intended to be consistent with the
committees understanding of competitive practices, levels of executive responsibility,
qualifications necessary for the particular executive position, and the expertise and
experience of the executive officer. Salary adjustments reflect the committees belief as to
competitive trends, the performance of the individual and, to some extent, the overall
financial condition of the Company.

Base salaries for our executive officers are established based on the scope of their
responsibilities, prior relevant background, professional experience, and technical training.
Also in this regard, the compensation committee takes into account competitive market
compensation paid by the companies represented in the compensation data it reviews for
similar positions, and the overall market demand for such executives. Although the Company
considered the same factors in establishing the base salaries of each of its executive
officers, due to the different levels of roles played by each executive, the base salaries
are justifiably substantially different.



Short-Term Incentives. The short-term incentive for an executive is the opportunity to
earn an annual cash bonus. The committee has concluded that bonus payments should be
primarily based on the achievement of specific predetermined profit and expense control
targets while a smaller portion should be discretionary based on the committees evaluation
of an executives individual performance in specific qualitative areas.

The compensation committee determined that the Companys shareholders interests are
best served by retaining the Chief Executive Officer and Chief Financial Officer on a
performance based package with no guaranteed bonus arrangements, while linking the bonus to
growth in net income, diluted earnings per share, revenues, recurring revenue streams, and
operating cash flows. Specifically, the Companys Chief Executive Officer and Chief Financial
Officer receives annual performance bonuses measured as a percentage of pretax income because
the compensation committee believes that pretax net income is not only the hallmark of sound,
profitable growth looked to by investors, but also generates the cash that fuels the
Companys internal product development and diversification initiatives. While the cash bonus
formula for the executive officers focuses essentially on pretax net income, it also takes
into account growth in top line revenue, strengthening of the Companys cash reserves, growth
in the Companys recurring revenue streams, reduction in customer attrition rates, retention
and strengthening of the senior management team, product and geographic diversification, and
a strong internal control structure that ensure the highest level of integrity.

Short-term incentive compensation is generally based on three performance criteria: (a)
profitability, (b) revenue growth, and (c) other specific performance criteria. Under the
short-term incentive plan for the fiscal year ended December 31, 2010, an incentive bonus of
$1,600,000 was awarded to Robin Raina, and a $81,564 incentive bonus was paid to Robert Kerris.

Potential bonuses, as a percentage of base salary, were higher for our principal
executive officer and principal financial officer, reflecting their greater responsibility
for and greater ability to influence the achievement of targets.

The following table sets forth for each named executive officer, the bonus percentage
potentially attributable to performance targets and the percentage attributable to the
committees discretion. The committee has the authority to adjust, waive or reset targets.

The following chart sets forth information regarding the actual annual cash incentive
awards made to Robin Raina and Robert Kerris, the Companys named executive officers.

Award

Target

Actual

Actual

Percentage

Incentive

Annual

Incentive

Subject to

Award as a

Actual

Incentive

Award as a

Objective/

Percentage

Annual

Award as a

Percentage

Subjective

of Base

Incentive

Percentage

of Base

Short Term Incentive Plan Participant

Criteria

Salary

Award

of Target

Salary

(Name and Position)

(%)

(%)

($)

(%)

(%)

Robin Raina, Chairman of the Board and
Chief Executive Officer

100/-

200

%

1,600,000

100

%

200

%

Robert F. Kerris, Chief Financial Officer and
Corporate Secretary

100/-

50

%

81,564

100

%

56

%



Long-Term Incentives. While salary and short-term incentives are primarily
designed to compensate current and past performance, the primary goal of the long-term
incentive compensation program is to directly link management compensation with the long-term
interests of the stockholders.

Nevertheless, the compensation committee in consultation with the entire Board of Directors,
determined that it would be preferable to give cash instead of options or meaningful numbers of
restricted stock grants to the executives in order to restrict variable expenses and to limit
dilution of company stock. Accordingly, the executives have not been given any new options in
2010 and have been given modest restricted stock in 2010.



Types of Equity Awards and Criteria for Award Type Selection. Prior to 2005, we relied
heavily on stock options to provide incentive compensation to our executive officers and
other key employees and to align their interests with those of our stockholders. Based on
changes in U.S. accounting rules and a general trend toward increased use of restricted stock
and decreased use of stock options, the committee has increased the number of awards using
restricted stock and decreased the number utilizing stock options. For the immediate future,
we intend to rely primarily on restricted stock grants to provide long-term incentive
compensation to our officers and key employees, without excluding the possibility of
continuing to also grant stock options as a form of incentive compensation.



Vesting and Holding Periods for Equity Incentive Compensation. As a means to encourage
long term thinking and encourage continued employment with us, the Companys equity awards
are usually subject to a multi-year vesting period. Historically, our grants of stock options
and restricted stock have vested over a three year period and the committee anticipates that
future awards will continue to be subject to multi-year vesting, most likely for similar
three year periods. Historically, the Company has not imposed minimum equity ownership
requirements for equity compensation awarded to its executive officers, nor has it required
any continued ownership of the securities issued pursuant to such awards after vesting. The
committee is still evaluating whether such a policy of minimum stock ownership levels or
award retention should be implemented and the potential parameters for any award retention
policy. It is anticipated that any such policy would provide for sales in the event of
hardship and sales sufficient to generate sufficient income to pay taxes in connection with
the award or other awards. The Committee does not anticipate making any determination on
whether to implement any such policies or the scope of any such policies before the summer of
2010.

The compensation committee does not use a specific formula to calculate the number of
stock options or restricted share awards to its executives nor does the compensation
committee explicitly set potential future award levels. In determining the specific amounts
to be granted to each executive, the compensation
committee takes into account factors such as the executives position, his or her
contribution to the Companys performance, and the overall package of cash and equity
compensation for the executive.

Peer Group Analysis

The compensation committee of the Companys board of directors oversees and reviews the
Companys executive compensation practices and is responsible for ensuring that the compensation of
the executive officers of the Company is aligned with and supports the Companys growth objectives.
The components of the Companys executive compensation include base salaries, discretionary cash
bonus incentive awards, long-term equity incentive compensation, and retirement benefits. In this
context the Companys Chief Executive Officer and Chief Financial Officer are referenced as named
executive officers or executive officers.

In 2010, the compensation committee compiled two distinct comparable groups to frame the
compensation committees deliberations on prospective executive compensation for the Companys
executive officers. One group is a conventionally arranged comparator group that is comprised of a
number of companies engaged in insurance and/or finance related activities in the United States
market within a range of net revenue and market capitalization that is comparable to Ebix (the
Insurance & Finance Group). In selecting this group of companies, the Committee focused on the
Chief Executive Officer of these companies being either a Founder Chief Executive Officer or a
Chief Executive Officer. However, only one such company matched the Companys net income growth
(measured either as one year increases or five year compound annual growth rates (CAGR)), five
year total shareholder return including reinvestment of dividends (TSR), or other relevant
measures. Because of the extent of the difference between the Companys growth and the performance
of these comparable companies, the compensation committee believed it important to review the
executive compensation practices at those companies that reflected the growth characteristics of
Ebix as nearly as could be determined. Accordingly, the compensation committee also searched public
filings for companies beyond just the insurance and finance industry with CAGR, TSR and annual
revenues similar to the Companys as well as those entities having had a Founder CEO who had led a
high growth trajectory for these companies (the Growth Group). The compensation committee
believes that the dual comparator groups approach is appropriate to accurately assess the
performance and compensation of the Companys executive officers. The Insurance and Finance Group
provides valuable information for use by the compensation committee concerning companies in the
same industry sector. The Growth Group provides valuable information for use by the compensation
committee about how the Company compared with other companies with similar performance.
Consideration was also given to the differences in size, scope, and complexity between the Company
and the various members of the respective comparator groups. Such considerations comprise the
judgmental factors that the compensation committee considers and are not based on a specific
formula or tied to a comparator group. For the surveys of the comparable groups, the compensation
committee considered peers to be companies, using data reported, that met the following criteria:

For the Insurance & Finance Group:



Market capitalization ranging from $100 million to $700 million



A Chief Executive Officer that is either a Founder CEO or a CEO who is seen
as a Founder CEO and/or has led a successful turnaround

Market capitalization ranging between approximately $150 million and $1.6
billion



A Chief Executive Officer of these companies that is either a Founder CEO
or a CEO who has successfully engineered a high growth trajectory.

The compensation committee determined that the following companies met the criteria for
the Insurance & Finance Group:



Universal Insurance Holdings



Safety Insurance Group, Inc.



First Mercury Financial Corporation

The compensation committee determined that the following companies met the criteria for
the Growth Group:



DG Fastchannel



Integral Systems



Eagle Bulk Shipping



Willis Lease



Phase Forward



Ultimate Software Group



Netlogic Microsystems



American Science & Engineering

With respect to long-term compensation, all of the five comparable companies in the Insurance
and Finance Group award time vested options and/or restricted stock from time to time as long-term
incentives. The compensation committee, however, in consultation with the entire Board of
Directors, determined that it would be preferable to give cash instead of options or substantial
sums of restricted stock grants to the executives in order to restrict variable expenses and to
limit dilution of company stock. Accordingly, the executives have not been given any new options in
2010 and have been given modest restricted stock in 2010.

The compensation committees survey of the Insurance and Finance Group indicates that the
compensation of the Ebixs Chief Executive Officer was at or above the 25th percentile for the
Insurance and Finance Group. The performance of Ebix, however, for the same period defined the 100%
percentile for the Insurance and Finance Group in 1 year net growth, 1 year net margin, 1 year
shareholder return, 5 year net income CAGR, 5 year revenue CAGR, and 5 year shareholder return. The
compensation committee also noted that the Companys net margin exceeded the net margin of each
other member of the Insurance and Finance Group.

The compensation committees survey of the Growth Group indicates that total compensation of
the Companys Chief Executive Officer was slightly above the 20th percentile. The compensation
committees report indicated that the Company was above the 89th percentile in the measure of
annualized revenue growth and substantially above the 100th percentile in the important measure of
net margins, profitability, and earnings, with Ebix being the leader in all these categories. The
Companys performance was not exceeded by any member of the Growth Group except in the area of
annualized growth where one company had marginally higher growth than Ebix.

Against these groups, the base salary of the Companys Chief Executive Officer is above the
65th percentile mark. The compensation committee noted that the degree of difference between the
Companys base pay practices for its Chief Executive Officer and those of the officers of other
companies in the comparable company groups surveyed is justified when considering the broader range
of duties pertaining to Ebixs Chief Executive Officer.

Equity Awards in 2010

In 2010, no stock options and 35,809 shares of restricted stock were granted to the named
executive officers of the Company.

Other Compensation Components

Company executives are eligible to participate in the Companys health care, insurance and
other welfare and employee benefit programs, which are the same for all eligible employees,
including Ebixs executive officers.

Use of Employment and Severance Agreements

In the past, the committee has determined that competitive considerations merit the use of
employment contracts or severance agreements for certain members of senior management. Presently,
however, no member of senior management is employed under an employment contract.

Recapture and Forfeiture Policies

Historically the Company has not had formal policies with respect to the adjustment or
recapture of performance based awards where the financial measures on which such awards are based
or to be based are adjusted for changes in reported results such as, but not limited to, instances
where the Companys financial statements are restated. The committee does not believe that
repayment should be required where the Plan participant has acted in good faith and the errors are
not attributable to the participants gross negligence or willful misconduct. In such later
situations, the committee believes the Company has or will have available negotiated or legal
remedies. However, the committee may elect to take into account factors such as the timing and
amount of any financial restatement or adjustment, the amounts of benefits received, and the
clarity of accounting requirements lending to any restatement in fixing of future compensation.

Deductibility of Compensation and Related Tax Considerations

As one of the factors in its review of compensation matters, the committee considers the
anticipated tax treatment to the Company and to the executives of various payments and benefits.



Section 162(m). Section 162(m) of the Internal Revenue Code of 1986, as amended (the
Code) generally limits to $1 million the amount that a publicly-held corporation is allowed
each year to deduct for the compensation paid to each of the corporations chief executive
officer and the corporations four most highly compensated executive officers, other than the
chief executive officer. However, performance-based compensation is not subject to the $1
million deduction limit. In general, to qualify as performance-based compensation, the
following requirements must be satisfied: (i) payments must be computed on the basis of an
objective, performance-based compensation standard determined by a committee consisting
solely of two or more outside directors, (ii) the material terms under which the
compensation is to be paid, including the business criteria upon which the performance goals
are based, and a limit on the maximum amount which may be paid to any participant pursuant to
any award with respect to any performance period, are approved by a majority of the
corporations stockholders, and (iii) the committee certifies that the applicable performance
goals were satisfied before payment of any performance-based compensation is made.

Although the Companys stock option plans generally have been structured with the goal
of complying with the requirements of Section 162(m), and the compensation committee believes
stock options awarded there under should qualify as performance-based compensation exempt
from limitations on deductibility under Section 162(m), the deductibility of any compensation
was not a condition to any compensation decision. The Company does not expect its ability to
deduct executive compensation to be limited by operation of Section 162(m). However, due to
interpretations and changes in the tax laws, some types of compensation payments and their
deductibility depend on the timing of an executives vesting or exercise of previously
granted rights and other factors beyond the compensation committees control which could
affect the deductibility of compensation.

The compensation committee will continue to carefully consider the impact of Section
162(m) when designing compensation programs, and in making compensation decisions affecting
the Companys Section 162(m) covered executives. We fully expect the majority of future stock
awards will be excludable from the Section 162(m) $1 million limit on deductibility, since
vesting of any such awards will likely be tied to performance-based criteria, or be part of
compensation packages which are less than $1 million dollars.
Nonetheless, the compensation committee believes that in certain circumstances factors
other than tax deductibility are more important in determining the forms and levels of
executive compensation most appropriate and in the best interests of the Company and its
stockholders. Accordingly, it may award compensation in excess of the deductibility limit,
with or without requiring a detailed analysis of the estimated tax cost of non-deductible
awards to the Company. Given our dynamic and rapidly changing industry and business, as well
as the competitive market for outstanding leadership talent, the compensation committee
believes it is important to retain the flexibility to design compensation programs consistent
with its compensation philosophy for the Company, even if some executive compensation is not
fully deductible.



Section 280G. Code Section 280G generally denies a deduction for a significant portion
of certain compensatory payments made to corporate officers, certain shareholders and certain
highly-compensated employees if the payments are contingent on a change of control of the
employer and the aggregate amounts of the payments to the relevant individual exceed a
specified relationship to that individuals average compensation from the employer over the
preceding five years. In addition, Code Section 4999 imposes on that individual a 20% excise
tax on the same portion of the payments received for which the employer is denied a deduction
under Section 280G. In determining whether to approve an obligation to make payments for
which Section 280G would deny the Company a deduction or whether to approve an obligation to
indemnify (or gross-up) an executive against the effects of the Section 4999 excise tax,
the committee has adopted an approach similar to that described above with respect to
payments which may be subject to the deduction limitations of Section 162(m).

Chief Executive Officer Compensation

The compensation policies described above apply equally to the compensation of the Chief
Executive Officer (CEO).

Potential Payments for Mr. Raina Upon a Change of Control

In 2010 our independent directors unanimously approved the recommendation of the compensation
committee regarding changes to the compensation structure for Mr. Raina. Specifically in this
regard, the independent directors unanimously approved the Companys execution of and entry into
the Acquisition Bonus Agreement (the Agreement) between the Company and Mr. Raina. The Agreement
aligns both the interests of the Companys stockholders and its Mr. Raina. Considering the
continued healthy growth of the Company and the prevailing comparatively low price to earnings
multiple of Ebixs common stock, the Board has evaluated the potential threat of the Company itself
being an acquisition target. The Agreement serves in part to allow for stockholder value to be
maximized by dissuading a potentially hostile acquisition attempt at an unacceptable price. Also,
the Board acknowledges that Mr. Rainas retention is critical to the future success and growth of
Ebix, and as such, the Agreement helps to ensure that Mr. Raina will be appropriately awarded for
his contributions prior to any potential acquisition event as well as to further motivate Mr. Raina
to maximize the value received by all stockholders of Ebix if the Company were to be acquired.

Under the terms of the Agreement the occurrence of any of the following events shall
constitute an Acquisition Event: (a) more the 50% of the voting stock of Ebix is sold,
transferred, or exchanged; (b) a merger or consolidation of the Company occurs; (c) the sale,
exchange, or transfer of substantially all of the Companys assets; or (d) the Company is acquired
or dissolved; provided, however, an Acquisition Event also must qualify as a change in control
event as such term is defined in Treasury Regulation 1.409A-3. Upon the occurrence of an
Acquisition Event, Mr. Raina shall receive from the acquiring company, in cash, an amount that is
determined by multiplying the Share Base by the Spread.



Spread is calculated by subtracting $23.84 (post three-for-one split, $7.95)
from the Net proceeds per share.



Share Base shall be the positive number, if any, that is determined when the
number of Shares Deemed Held by Executive immediately prior to the Closing Date is
subtracted from the number of shares that is 20% of the total shares of common stock
outstanding immediately prior to the Closing Date on a fully diluted basis, taking into
account the effect of the occurrence of the Liquidation Event on the vesting,
conversion or exercise terms of any outstanding securities or other instruments
exercisable for, or convertible into, shares of common stock; provided that the difference
that is so obtained shall be reduced by the number of shares, if any, sold by Executive
after the first public announcement by the Company or any other party of any agreement,
arrangement, Agreement, proposal or intent to engage in a transaction which would
constitute a Liquidation Event.

The number of Shares Deemed Held by Executive immediately prior to the Closing Date shall
equal the number of shares of common stock of the Company then beneficially owned by Executive plus
any shares sold by Executive between the signing of this agreement and the Closing date, plus any
additional shares issuable to Executive (other than pursuant to this Agreement) immediately prior
to or upon the Closing Date upon the exercise of stock options or the conversion of convertible
securities, after giving effect to any acceleration of vesting that will occur due to the
occurrence of the Liquidation Event.



As defined in the Agreement, Net Proceeds shall equal the sum of any cash
consideration received for each share of Company common stock plus the Fair Market Value
of any securities received or receivable per share of Company common stock held by the
stockholders of the Company by virtue of an Acquisition Event.

The Fair Market Value of any securities received by Company stockholders shall be determined
as follows: (i) if such securities are listed and traded on a national securities exchange (as such
term is defined by the Securities Exchange Act of 1934) on the date of determination, the Fair
Market Value per share shall be the average of the closing prices of the securities on such
national securities exchange, over the twenty trading day period ending three trading days prior to
the closing date of an Acquisition Event; (ii) if such securities are traded in the
over-the-counter market, the Fair Market Value per share shall be the average of the closing bid
and asked prices on the day immediately prior to the closing date of an Acquisition Event; or (iii)
if such securities are not listed on a national securities exchange or, if such securities are
traded in the over-the-counter market but there shall be no published closing bid and asked prices
available on the date immediately prior to the Closing Date, then the Board shall determine the
Fair Market Value of such securities from all relevant available facts, which may include the
average of the closing bid and ask prices reflected in the over-the-counter market on a date within
a reasonable period either before or after the date of determination, or opinions of independent
experts as to value and may take into account any recent sales and purchases of such securities to
the extent they are representative.

In the event of a determination by an accounting firm of national standing that any payment or
distribution by the Company to or for the benefit of Mr. Raina, whether paid, payable, distributed
or distributable pursuant to the Agreement or otherwise would be subject to the excise tax imposed
by Section 4999 of the Internal Revenue Code of 1986 as amended (or any successor provision) or any
interest or penalties with respect to such excise tax, then Mr. Raina shall be entitled to receive
an additional payment in an amount such that after the payment by Mr. Raina of all taxes (including
any interest or penalties imposed with respect to such taxes), Mr. Raina retains an amount equal to
any such tax.

The base price of $7.95 from which any Net Proceeds will be subtracted represents the
approximate price per share of the Companys common stock on March 25, 2009 when the independent
members of the Board agreed on the desirability of this type of agreement.

The members of the Compensation Committee, Messrs. Benz and Keller, have never been officers
or employees of the Company, nor have they ever been considered insiders of the Company.

Committee Conclusion

Attracting and retaining talented and motivated management and employees is essential to
create long-term stockholder value. Offering a competitive, performance-based compensation program
with a large equity component helps to achieve this objective by aligning the interests of the
Companys CEO and other executive officers with those of stockholders. The committee believes that
Ebixs 2010 compensation program met these objectives. Likewise, based on our review, the committee
finds the total compensation (and, in the case of the severance and
change-in-control scenarios, the potential payouts) to the Companys CEO and other named
executive officer in the aggregate to be reasonable and not excessive.

Compensation Committee and Management Review and Authorization

The compensation committee has reviewed the above Compensation Disclosure and Analysis with
the Companys Chief Executive Officer and Chief Financial Officer. Based on a review of this
Compensation Disclosure and Analysis report and discussion with the compensation committee, the
Companys Chief Executive Officer and Chief Financial Officer have approved the inclusion of the
Compensation Disclosure and Analysis report in this Form 10-K.

Authorization

This report has been submitted by the compensation committee:

Hans U. Benz and Hans Ueli Keller

The foregoing report shall not be deemed incorporated by reference by any general statement
incorporating by reference this annual report into any filing under the Securities Act of 1933 or
under the Securities Exchange Act of 1934, except to the extent that we specifically incorporate
this information by reference, and shall not otherwise be deemed filed under such Acts.

Risk Considerations

Our Compensation Committee has reviewed risks arising from our compensation policies and
practices for both our executives and non-executive employees and has determined that they are not
reasonably likely to have a material adverse effect on the Company.

Executive Compensation and Director Compensation Tables - All references to any amount of stock,
restricted stock, or options in the below tables represent the amounts at December 31, 2010 reflect
the effect of the Companys three-for-one stock split on January 4, 2010.

During April 2010, the Compensation Committee of the Board of Directors of the Company gave
final approval to award 32,751 shares of restricted stock to Robin Raina, the Companys
Chairman, Chief Executive Officer and President. This award was made pursuant to the 2006
incentive compensation program (the 2006 Program) approved by the Companys Board of
Directors. The number of shares of restricted stock issued to Mr. Raina represent
approximately 25% of the aggregate of his total salary and cash bonus compensation earned for
2009, divided by the market price of the Companys stock on April 1, 2010. This is the date
that the Compensation Committee of the Board of Directors approved the restricted stock grant.
The Company recognized compensation expense of approximately $89,737 related to these shares
during the year ended December 31, 2010. The Company recognized a total compensation expense
of $358,321 related to all share grants inclusive of the March 25, 2009 grant during the year
ended December 31, 2009.

(2)

During March 2009, the Compensation Committee of the Board of Directors of the Company gave
final approval to award 44,040 shares of restricted stock to Robin Raina, the Companys
Chairman, Chief Executive Officer and President. This award was made pursuant to the 2006
incentive compensation program (the 2006 Program) approved by the Companys Board of
Directors. The number of shares of restricted stock issued to Mr. Raina represent
approximately 25% of the aggregate of his total salary and cash bonus compensation earned for
2008, divided by the market price of the Companys stock on March 25, 2009. This is the date
that the Compensation Committee of the Board of Directors approved the restricted stock grant.
The Company recognized compensation expense of approximately $89,737 related to these shares
during the year ended December 31, 2009. The Company recognized a total compensation expense
of $358,321 related to all share grants inclusive of the March 25, 2009 grant during the year
ended December 31, 2009.

(3)

During March 2008, the Compensation Committee of the Board of Directors of the Company gave
final approval to award 48,222 shares of restricted stock to Robin Raina, the Companys
Chairman, Chief Executive Officer and President. This award was made pursuant to the 2006
incentive compensation program (the 2006 Program) approved by the Companys Board of
Directors. The number of shares of restricted stock issued to Mr. Raina represents
approximately 25% of the aggregate of his total salary and cash bonus compensation earned for
2007, divided by the market price of the Companys stock on March 24, 2008. This is the date
that the Compensation Committee of the Board of Directors approved the restricted stock grant.
The Company recognized compensation expense of approximately $125,000 related to these shares
during the year ended December 31, 2009. The Company recognized a total compensation expense
of $307,319 related to all share grants inclusive of the March 24, 2008 grant during the year
ended December 31, 2008.

(4)

For 2010, the Company made a matching grant pursuant to its 401(k) Plan of $3,676, and
provided a grant of $23,000 to the Robin Raina Foundation as well as a matching grant of
$11,000 to the same. For 2009, the Company made a matching grant pursuant to its 401(k) Plan
of $3,675, and paid a conveyance expense of $6,000. For 2008, the Company made a matching
grant pursuant to its 401(k) Plan of $3,450 and paid additional dependent medical insurance of
$11,000, a partial property tax payment of $4,000 and a conveyance expense of $6,000. For
2007, the Company made a matching grant pursuant to its 401(k) Plan of $3,300.

(5)

For 2010, the Company made a matching grant pursuant to its 401(k) Plan of $2,197. For 2009,
the Company made a matching grant pursuant to its 401(k) Plan of $3,025.

(6)

$500,000 of Mr. Rainas bonus has yet to be paid as of March 16, 2011. This outstanding bonus
pertains to the executives performance during the year ending December 31, 2010.

Robin Raina has been awarded restricted stock grants by the Compensation Committee: (i) a
grant of 75,186 shares of Company common stock on February 3, 2006 of which 0 shares were
unvested as of December 31, 2010; (ii) a grant of 76,509 shares of Company common stock on May
9, 2007 of which 0 shares were unvested as of December 31, 2010; a grant of 22,500 shares of
Company common stock on November 11, 2007 of which 0 shares were unvested as of December 31,
2010; (iv) a grant of 48,222 shares of Company common stock on March 24, 2008 of which 16,074
were unvested as of December 31, 2010; a grant of 44,040 shares of which 18,354 were unvested
as of December 31, 2010; and a grant of 32,751 shares of which 32,751 were unvested as of
December 31, 2010.

The Company does not generally offer non-tax qualified pension benefit plans or nonqualified
deferred compensation to its officers, and none of its named executive officers currently
participate or have participated in any non-tax qualified pension benefit plans or nonqualified
deferred compensation plan during the past fiscal year.

Director Compensation

Following each Annual Meeting of our stockholders, non-employee members of the board of
directors are typically granted an option to purchase 27,000 shares of common stock at an exercise
price per share of 100% of the fair market value for each share of common stock on the date of the
grant.

On November 21, 2010, the board of directors granted to each non-employee director 9,000 stock
options of which onefourth will vest during 2011, and the remaining options will vest ratably
each quarter in the years 2012, 2013 and 2014. Such grants were made pursuant to boards policy set
forth on November 11, 2007. Each non-employee director received an annual cash retainer of $14,000
during 2009. Mr. Keller and Benz received $5,000 following the annual meeting of stockholders on
November 17, 2010 for serving on both the Audit and Compensation Committees. The Audit Committee
Chairman, Mr. Bhalla received cash compensation of $5,000 following the November 17, 2010 meeting.

On December 4, 2009, the board of directors granted to each non-employee director 27,000 stock
options of which onefourth will vest during 2010, and the remaining options will vest ratably
each quarter in the years 2011, 2012 and 2013. Such grants were made pursuant to boards policy set
forth on November 11, 2007. Each non-employee director received an annual cash retainer of $14,000
during 2009. Mr. Keller and Benz received $5,000 following the annual meeting of stockholders on
October 30, 2009 for serving on both the Audit and Compensation Committees. The Audit Committee
Chairman, Mr. Bhalla received cash compensation of $5,000 following the October 30, 2009 meeting.

On November 11, 2007, the board of directors met and decided to double the amount of options
granted to each non-employee director it to 27,000 stock options after each annual meeting of
stockholders. During 2007, however, no stock options or restricted stock were granted to any
non-employee director. On February 8, 2008, the board of directors granted to each non-employee
director 27,000 stock options. Such grants were made pursuant to boards policy set forth on
November 11, 2007. Each non-employee director received an annual cash retainer of
$14,000 during 2007. Mr. Keller and Benz received $5,000 following the annual meeting of
stockholders on November 15, 2007 for serving on both the Audit and Compensation Committees. The
Audit Committee Chairman, Mr. Bhalla received cash compensation of $5,000 following the November
15, 2007 meeting.

Amounts reflect the dollar amount recognized for financial statement reporting purposes for
the fiscal year ended December 31, 2010, in accordance with FASB ASC Topic 718 and thus may
include amounts from awards granted prior to 2010.

The following table lists below the aggregate number of outstanding options held by each
director as of December 31, 2010:

As of December 31, 2010, we maintained the 1996 Stock Incentive Plan, as amended and restated
in 2006. Our stockholders also approved the 2010 Stock Incentive Plan at our annual meeting on
November 17, 2010. No grants from this plan have yet been made. The table below provides
information as of December 31, 2010 related to these plans.

The following table sets forth, as of March 11, 2011, the ownership of our Common Stock by
each of our directors, by each of our Named Executive Officers (as defined on page 12), by all
of our current executive officers and directors as a group, and by all persons known to us to
be beneficial owners of more than five percent of our Common Stock. The information set forth
in the table as to the current directors, executive officers and principal stockholders is
based, except as otherwise indicated, upon information provided to us by such persons. Unless
otherwise indicated, each person has sole investment and voting power with respect to the
shares shown below as beneficially owned by such person.

(2)

Ownership consists of shares of our common stock
beneficially owned by Fidelity Management &
Research Company, a wholly-owned subsidiary of FMR LLC (Fidelity), in its
capacity as an
investment advisor, as disclosed on its joint Schedule 13G/A
dated March 15, 2011, as filed with the SEC. Fidelity reports that sole dispositive
power resides in Edward C. Johnson, III and FMR LLC. The address of Fidelity is 82 Devonshire
Street, Boston, Massachusetts 02109.

(3)

The address of the Rennes Foundation is Rätikonerstrasse 13, P.O. Box 125, 9490 Vaduz,
Principality of Liechtenstein. The address and information set forth in the table as to this
stockholder are based on a Schedule 13G filed by this stockholder on April 2, 2008 and the
rights pursuant to that certain convertible note purchased by the Rennes Foundation from the
Company on August 25, 2009.

(4)

Ownership consists of shares of our common stock beneficially owned by BlackRock, Inc.,
BlackRock Japan Co. Ltd., BlackRock Institutional Trust Company, N.A., BlackRock Fund
Advisors, BlackRock Asset Management Australia Limited, BlackRock International Ltd.,
BlackRock Investment Management, LLC, BlackRock Asset Management Ireland Limited, and.
BlackRock International Limited (collectively BlackRock), as disclosed on its joint Schedule
13G, dated February 4, ,2011 for the period ended December 31, 2010, as filed with the SEC.
BlackRock reports that it has sole voting power and sole dispositive power with respect to
10,295,220 shares. The address of BlackRock is 40 East 52nd Street, New
York, New York 10022.

(5)

Based on the Companys internal records as the Company cannot access any Schedule 13 filing
for this holder.

(6)

Ownership consists of shares of our common stock beneficially owned by The Vanguard Group,
Inc. and its wholly-owned subsidiary, Vanguard Fiduciary Trust Company (collectively,
Vanguard), as disclosed on Vanguards joint schedule 13G, dated February 10, 2011, for the
period ended December 31, 2010, as filed with the SEC. Vanguard reports that it has sole
voting power with respect to 1,895,634 shares, sole dispositive power with respect to
1,766,714 shares and shared dispositive power with respect to 39,920 shares. The address of
Vanguard is 100 Vanguard Blvd., Malvern, Pennsylvania 19355.

(7)

Mr. Rainas ownership includes 30,660 shares of restricted stock as well as options to
purchase 2,565,000 shares of our common stock which are exercisable as of March 11, 2011, or
that will become exercisable within 60 days after that date. The address of Mr. Raina is 5
Concourse Parkway, Suite 3200, Atlanta, Georgia 30328.

(8)

Mr. Kerris ownership includes 1,036 shares of restricted stock as well as options to
purchase 0 shares of our common stock which are exercisable as of March 11, 2011, or that will
become exercisable within 60 days after that date.

(9)

Mr. Bhallas ownership includes options to purchase 102,909 shares of our common stock which
are exercisable as of March 11, 2011, or that will become exercisable within 60 days after
that date.

(10)

Mr. Kellers ownership includes options to purchase 27,012 shares of our common stock which
are exercisable as of March 11, 2011, or that will become exercisable within 60 days after
that date.

(11)

Mr. Benzs ownership includes options to purchase 25,314 shares of our common stock which are
exercisable as of March 11, 2011, or that will become exercisable within 60 days after that
date.

(12)

Mr. Eckerts ownership includes options to purchase 72,534 shares of our common stock which
are exercisable as of March 11, 2011, or that will become exercisable within 60 days after
that date.

(13)

Mr. Herters ownership includes options to purchase 45,534 shares of our common stock which
are exercisable as of March 11, 2011, or that will become exercisable within 60 days after
that date.

(14)

Robin Raina Foundation a 501(c) charity ownership includes 177,064 shares which were donated
by Robin Raina from vested restricted stock grants previously issued to Mr. Raina by the
Company. The Federal Tax ID Number for the foundation is 51-0497387.

Rahul Raina, is the Companys Assistant Vice President of Business Process Outsourcing and the
brother of Robin Raina, our Chairman of the Board, President, and Chief Executive Officer. During
2010 he was paid a salary of $120,000 and he received a cash bonus in the amount of $25,000.
During 2009 he was paid a salary of $120,000, a bonus of $7,500 and received a restricted stock
grant on March 14, 2009 of 6,081 shares of common stock at a price of $8.22 per share, which was
the fair value of the stock on the date of the grant. Previously in 2003 Rahul Raina was granted
options to purchase 225,000 shares of our common stock. The options had a four year vesting period
from the date of grant and expire ten years from the date of grant. The options had originally been
granted with an exercise price below the fair market value on the date of the grant. In December
2006 these options were amended and the exercise price was increased from $0.32 per share to $0.74
per share, which is equal to the fair market value of the common stock underlying the stock options
at the original grant date. The option grant was valued using the Black-Scholes option pricing
model. This grant was not subject to any of our stockholder approved stock incentive plans. The
expense for these options was fully recognized as of December 31, 2007. The options are presently
fully vested and as of December 31, 2010 there are 178,000 of such options that are outstanding but
unexercised.

Consistent with Ebixs corporate mission of giving back to the communities in which we operate
our business, during the year ended December 31, 2010 Ebix donated $39 thousand to the Robin Raina
Foundation, a non-profit 501(c) charity in support of fifty very under privileged children living
in the poverty stricken areas of Delhi, India; this amount includes $16 thousand in matching
contributions made by our employees.

Item 14:

PRINCIPAL ACCOUNTANT FEES AND SERVICES

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Cherry, Bekaert & Holland, LLP (CBH) served as Ebixs registered public accountants for the
years ended December 31, 2010 and 2009.

The following table presents fees billed for professional services rendered for the audit of
our annual financial statements for 2010 and 2009 and fees billed for other services rendered
during 2010 and 2009 by CBH, our independent registered public accounting firm during these
periods.

Services Rendered by Cherry, Bekaert & Holland, LLP

2010

2009

Audit Fees (1)

$

339,600

$

343,250

Audit Related Fees

$

165,346

$



Tax Fees

$



$



All Other Fees (2)

$



$

60,000

(1)

Including fees for the audit of our annual financial statements included in our Form 10-K and
reviews of the financial statements in our Forms 10-Q, but excluding audit-related fees.

(2)

Includes fees related to the audit of a recently acquired business.

The Audit Committee considered and pre-approved all of the above-referenced fees and services.
Pursuant to a policy adopted by our Board of Directors, the Audit Committee requires advance
approval of all audit services and
permitted non-audit services to be provided by the independent registered public accounting
firm as required by the Securities Exchange Act of 1934.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934,
the Registrant has duly caused this amendment to be signed on its behalf by the undersigned,
thereunto duly authorized.

EBIX, INC.
(Registrant)

By:

/s/ ROBIN RAINA

Robin Raina

Chairman of the Board, President and
Chief Executive Officer

Date: March 16, 2011

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the capacities and on the
dates indicated.

Stock Purchase Agreement dated February 23, 2004 by and
among the Company and the shareholders of LifeLink
Corporation (incorporated by reference to Exhibit 2.1 to
the Companys Current Report of Form 8-K dated February 23,
2004 (the February 2004 8-K)) and incorporated herein by
reference.

2.2

Secured Promissory Note, dated February 23, 2004, issued by
the Company (incorporated by reference to Exhibit 2.2 of
the February 2004 8-K and incorporated herein by
reference).

2.3

Purchase Agreement, dated June 28, 2004, by and between
Heart Consulting Pty Ltd. And Ebix Australia Pty Ltd.
(incorporated by reference to Exhibit 2.1 to the Companys
Current Report of Form 8-K dated July 14, 2004 (the July
14, 2004 8-K)) and incorporated herein by reference.

2.4

Agreement, dated July 1, 2004, by and between Heart
Consulting Pty Ltd. and Ebix, Inc. (incorporated by
reference to Exhibit 2.2 to the Companys Current Report of
Form 8-K dated July 14, 2004 (the July 14, 2004 8-K)) and
incorporated herein by reference.

2.5

Agreement Plan of Merger by and among Ebix, Finetre and
Steven F. Piaker, as shareholders Representative dated
September 22, 2006 (incorporated by reference to Exhibit
2.1 to the Companys Current Report on 8-K/A dated October
2, 2006) and incorporated herein by reference.

2.6

Asset Purchase Agreement, dated May 9, 2006, by and among
Ebix, Inc., Infinity Systems Consulting, Inc. and the
Shareholders of Infinity Systems Consulting, Inc.
(incorporated here by reference to Exhibit 2.1 to the
Companys Current Report on Form 8-K/A dated May 9, 2006)
and incorporated herein by reference.

2.7

Agreement and Plan of Merger dated October 31, 2007 by and
among Ebix, Inc., Jenquest, Inc. IDS Acquisition Sub. and
Robert M. Ward as Shareholder Representative (incorporated
here by reference to Exhibit 2.1 to the Companys Current
Report on Form 8-K/A dated November 7, 2007) and
incorporated herein by reference.

2.8

Stock Purchase Agreement by and among Ebix, Inc.,
Acclamation Systems, Inc., and Joseph Ott (incorporated
here by reference to Exhibit 2.1 to the Companys Current
Report on Form 8-K dated August 5, 2008 and incorporated
herein by reference).

Agreement and Plan of Merger, dated September 30, 2009, by
and amongst Ebix, E-Z Data, and Dale Okuno and Dilip
Sontakey, as Sellers (incorporated here by reference to
Exhibit 2.1 to the Companys Current Report on Form 8-K
dated October 6, 2009 and incorporated herein by
reference.)

2.11

IP Asset Purchase Agreement, dated September 30, 2009, by
and amongst Ebix Singapore PTE LTD., Ebix, Inc., E-Z Data,
and Dale Okuno and Dilip Sontakey, as Shareholders dated
September 30, 2009 (incorporated here by reference to
Exhibit 2.2 to the Companys Current Report on Form 8-K
dated October 6, 2009 and incorporated herein by
reference.)

2.12

Agreement and Plan of Merger, dated August 29, 2010, by and
amongst Ebix Inc., A.D.A.M., Inc., and Eden Acquisition
Sub, Inc (incorporated here by reference to Exhibit 2.1 to
the Companys Current Report on Form 8-K dated August 31,
2010 and incorporated herein by reference.)

3.1

Certificate of Incorporation, as amended, of Ebix, Inc.
(filed as Exhibit 3.1 to the Companys Annual Report on
Form 10-K for the fiscal year ended December 31, 2009 and
incorporated herein by reference).

Delphi Information Systems, Inc. 1989 Stock Purchase Plan
(included in the prospectus filed as part of the Companys
Registration Statement on Form S-8 (No. 33-35952) and
incorporated herein by reference). +

10.4

Delphi Information Systems, Inc. Non-Qualified Stock Option
Plan for Directors (filed as Exhibit 10.4 to the Companys
Annual Report on Form 10-K for the fiscal year ended March
31, 1992 and incorporated herein by reference). +

Lease agreement effective October, 1998 between the Company
and 485 Properties LLC relating to premises at Five
Concourse Parkway, Atlanta, Georgia (filed as Exhibit 10.16
to the Companys Transition Report on Form 10-K for the
transition period from April 1, 1998 to December 31, 1998
and incorporated herein by reference).

Delphi Information Systems, Inc. 1999 Stock Purchase Plan
(filed as Exhibit 10.33 to the Companys Annual Report on
Form 10-K for the year ended December 31, 1999 and
incorporated herein by reference).+

10.9

Severance agreement, between the Company and Richard J.
Baum, dated as of October 4, 2000 (filed as Exhibit 10 to
the Companys Quarterly Report on Form 10-Q for the quarter
ended September 30, 2000 and incorporated herein by
reference). +

10.10

Sublease agreement dated October 11, 2000, between the
Company and Eric Swallow and Deborah Swallow, relating to
the premises at 2055 N. Broadway, Walnut Creek, CA. (filed
as Exhibit 10.27 to the Companys Annual Report on Form
10-K for the year ended December 31, 2000 and incorporated
herein by reference).

10.11

First amendment to lease agreement dated June 26, 2001,
between the Company and PWC Associates, relating to
premises of Building Two of the Parkway Center, Pittsburgh,
PA. (filed as Exhibit 10.20 to the Companys Annual Report
on Form 10-K for the year ended December 31, 2001 and
incorporated herein by reference).

10.13

Share Exchange and Purchase Agreement between the Company
and Brit Insurance Holdings PLC (filed as Exhibit 10.1 to
the Companys Quarterly Report on Form 10-Q for the quarter
ended March 31, 2001 and incorporated herein by reference).

10.14

Registration Rights Agreement between the Company and Brit
Holdings Limited (filed as Exhibit 10.2 to the Companys
Quarterly Report on Form 10-Q for the quarter ended March
31, 2001 and incorporated herein by reference).

10.15

Share Purchase Agreement dated January 16, 2004, by and
between Ebix, Inc. and CF Epic Insurance and General Fund
(filed as Exhibit 99.1 to the Companys S-3 (No.
333-112616), and incorporated herein by reference).

10.16

Second Amendment to the Lease Agreement dated June 3, 2003
between the Company and 485 Properties, LLC relating to the
premises at Five Concourse Parkway, Atlanta, Georgia (filed
as Exhibit 10.1 to the Companys Quarterly Report on Form
10-Q for the quarter ended June 30, 2003 and incorporated
herein by reference).

Ebix, Inc. 1996 Stock Incentive Plan as amended by the
first, second, third and fourth amendments thereto
(incorporated by reference to Exhibit 10.18 to the
Companys Annual Report on Form 10-K for the year ended
December 31, 2004 and incorporated herein by reference).

10.18

Amended and Restated Revolving Line of Credit from LaSalle
Bank, National Association, Amended and Restated Loan and
Security Agreement and Pledge Agreement dated April 21,
2004 (incorporated by reference to Exhibit 10.1 to the
Companys Quarterly Report on Form 10-Q for the quarter
ended March 31, 2004 and incorporated herein by reference).

10.19

First Amendment to the Loan and Security Agreement, dated
July 1, 2004, between Ebix, Inc. and LaSalle National Bank
(incorporated by reference to Exhibit 10.20 to the
Companys Annual Report on Form 10-K for the year ended
December 31, 2004 and incorporated herein by reference).

10.20

Second Amendment to Loan and Security Agreement between
Ebix, Inc. and the Company, effective as of December 31,
2004, between Ebix, Inc. and LaSalle National Bank.
(incorporated by reference to Exhibit 10.1 to the Companys
Current Report on Form 8-K dated February 23, 2005 and
incorporated herein by reference).

10.21

Third Amendment to Loan and Security Agreement between
Ebix, Inc. and the Company, effective as of October 20,
2005, between Ebix, Inc. and LaSalle National Bank
(incorporated by reference to Exhibit 10.1 to the Companys
Quarterly Report on Form 10-Q for the period ended
September 30, 2005 and incorporated herein by reference).

10.22

Second Amended and Restated Loan and Security Agreement,
dated August 31, 2006 between Ebix, Inc. and LaSalle
National Bank.(incorporated by reference to Exhibit 2.2 on
Form 10-Q for the quarter ended September 30, 2006 and
incorporated herein by reference).

10.23

Lease agreement dated January 1, 2002, between LifeLink
Building LLC and LifeLink Corporation (which was acquired
by Ebix, Inc. in February 2004), relating to the premises
at The LifeLink Building located at 1918 Prospector Drive,
Park City, UT 84060 (incorporated by reference to Exhibit
10.23 to the Companys Annual Report on Form 10-K for the
year ended December 31, 2004 and incorporated herein by
reference).

10.24

Form of Restricted Stock Agreement under the Companys 1996
Stock Incentive Plan (incorporated by reference to Exhibit
10.1 to the Companys Current Report on Form 8-K dated June
7, 2005 and incorporated herein by reference). +

10.25

Stock Purchase Agreement, dated April 28, 2005, by and
between Ebix, Inc. and Craig Wm. Earnshaw (incorporated by
reference to Exhibit 10.1 to the Companys Current Report
on Form 8-K dated April 28, 2005 and incorporated herein by
reference).

10.26

Share Purchase Agreement made and entered into as of June
1, 2007, by and among Ebix, Inc, and Luxor Capital
Partners, LP, a Delaware limited partnership and Luxor
Capital Partners Offshore, Ltd, a Cayman Islands exempted
company (incorporated by reference to Exhibit 10.1 to the
Companys Current Report on Form 8-K dated June 6, 2007 and
incorporated herein by reference).

10.27

Secured Convertible Note Purchase effective as of December
18, 2007, by and between Ebix, Inc., and Whitebox VSC Ltd.,
a limited partnership organized under the laws of the
British Virgin Islands, (incorporated by reference to
Exhibit 10.1 to the Companys Current Report on Form 8-K
dated December 26, 2007 and incorporated herein by
reference).

10.28

2.5% Convertible Secured Promissory Note dated December 18,
2007 by Ebix, Inc. (incorporated by reference to Exhibit
10.1 to the Companys Current Report on Form 8-K dated
December 26, 2007 and incorporated herein by reference).

Share Purchase Agreement made and extended into as of April
2, 2008 by and among Ebix, Inc. and Rennes Foundation
(incorporated by reference to Exhibit 10.1 to the Companys
Current Report on Form 8-K filed April 14, 2008).

10.30

Share Purchase Agreement made and entered into as of April
7, 2008 by and among Ebix, Inc. and Ashford Capital
Management, Inc. (incorporated by reference to Exhibit
10.30 to the Companys Current Report on Form 8-K filed
April 14, 2008).

10.31

Stock Purchase Agreement made and entered into as of April
16, 2008 by and among Ebix, Inc. and Brit Insurance
Holdings, Inc. (incorporated by reference to Exhibit 10.31
to the Companys Form 8-K filed April 17, 2008).

10.32

Secured Convertible Note Purchase effective as of July 11,
2008, by and between Ebix, Inc., and Whitebox VSC Ltd., a
limited partnership organized under the laws of the British
Virgin Islands (incorporated by reference to Exhibit 10.1
to the Companys Current Report on Form 8-K dated July 16,
2008 and incorporated herein by reference).

10.33

2.5% Convertible Secured Promissory Note dated July 11,
2008 by Ebix, Inc. (incorporated by reference to Exhibit
10.1 to the Companys Current Report on Form 8-K dated July
16, 2008 and incorporated herein by reference).

10.34

Amendment to Secured Promissory Note Dated December 18,
2008 entered into as of June 25, 2008 between Ebix, Inc.,
and Whitebox VSC Ltd., a limited partnership organized
under the laws of the British Virgin Islands (incorporated
by reference to Exhibit 10.1 to the Companys Current
Report on Form 8-K dated July 1, 2008 and incorporated
herein by reference).

10.35

Acquisition Bonus Agreement by and between Ebix, Inc., and
Robin Raina dated as of July 15, 2009 (incorporated by
reference to Exhibit 99.1 to the Companys Current Report
on Form 8-K dated July 21, 2009 and incorporated herein by
reference).+

10.36

Third Amendment to the Second Amended and Restated Loan and
Security Agreement between Ebix, Inc. and Bank of America
Corporation dated August 27, 2009 (incorporated by
reference to Exhibit 2.1 to the Companys Current Report on
Form 8-K dated August 28, 2009 and incorporated herein by
reference).

10.37

Second Amendment to Secured Promissory Note Due December
18, 2009 between Ebix, Inc. and Whitebox VSC, Ltd dated
August 24, 2009 (incorporated by reference to Exhibit 2.2
to the Companys Current Report on Form 8-K dated August
28, 2009 and incorporated herein by reference).

10.38

Amendment to Secured Promissory Note Due July 11, 2010
between Ebix, Inc. and Whitebox VSC, Ltd. Dated August 24,
2009 (incorporated by reference to Exhibit 2.3 to the
Companys Current Report on Form 8-K dated August 28, 2009
and incorporated herein by reference).

10.39

Convertible Note Purchase Agreement by and between Ebix,
Inc. and Whitebox VSC, Ltd dated August 26, 2009
(incorporated by reference to Exhibit 10.1 to the Companys
Current Report on Form 8-K dated August 28, 2009 and
incorporated herein by reference).

10.40

Convertible Promissory Note by and between Ebix, Inc. and
Whitebox VSC, Ltd dated August 26, 2009 (incorporated by
reference to Exhibit 10.2 to the Companys Current Report
on Form 8-K dated August 28, 2009 and incorporated herein
by reference).

10.41

Convertible Note Purchase Agreement by and between Ebix,
Inc. and IAM Mini-Fund 14 Limited dated August 26, 2009
(incorporated by reference to Exhibit 10.3 to the Companys
Current Report on Form 8-K dated August 28, 2009 and
incorporated herein by reference).

10.42

Convertible Promissory Note by and between Ebix, Inc. and
IAM Mini-Fund 14 Limited dated August 26, 2009
(incorporated by reference to Exhibit 10.4 to the Companys
Current Report on Form 8-K dated August 28, 2009 and
incorporated herein by reference).

Convertible Note Purchase Agreement by and between Ebix,
Inc. and the Rennes Foundation dated August 25, 2009
(incorporated by reference to Exhibit 10.5 to the Companys
Current Report on Form 8-K dated August 28, 2009 and
incorporated herein by reference

14.1

Ebix, Inc. Code of Ethics for Senior Financial Officers
(incorporated by reference to Exhibit 14.1 to the Companys
Registration Statement on Form S-1 dated November 4, 2008)
and incorporated herein by reference.